5140 E Atherton St APT 9, Long Beach, CA 90815 — 2.2% Cash-on-Cash

About this property

5140 E Atherton St APT 9 is a 2-bed, 2-bath condo in Long Beach's 90815 zip code, spanning 1,241 square feet and listed at $539,000 after a $11,000 price reduction.

The unit sits within Sovereign Park Estates, a larger community that the listing positions along a river channel away from major streets. Whether that translates to quieter tenants or just a quieter listing depends on the renter, but the physical setup is notable: an expansive private patio off the main living area and an open-concept kitchen with quartz countertops and a center island give the space more livability than a typical 1,241-square-foot floor plan suggests.

Two recent capital improvements stand out from an investor's perspective. Mini-split heating and cooling systems were installed in both bedrooms in 2025, and a new water heater was installed in 2026 — both items that typically prompt landlord headaches within the first few years of ownership are already addressed. The oak hardwood floors were refinished in 2021. A new circuit breaker went in during 2022. These aren't cosmetic upgrades; they're the mechanical line items that protect near-term cash flow.

The property has been on the market 53 days, which is long relative to the three- and four-day absorption times seen on other 90815 listings right now. That lag, combined with the $11,000 price cut already taken, suggests some negotiating room may remain. Tax-assessed value sits at $438,383 against the $539,000 ask.

The investment case

A 2.2% cash-on-cash return on a $539,000 condo is thin by national standards, but in Long Beach it represents one of the better cash-flow outcomes available at this price point.

List Price

$539,000

Monthly Payment (PITI+HOA)

$3,568

Principal & Interest

$2,762

Property Tax

$0

Insurance

$180

HOA

$626

PMI

$0

Est. Monthly Rent

$3,768

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

2.2%

Cap Rate

6.6%

Monthly Cash Flow

$200

Gross Rent Multiplier

11.9

DSCR

1.1

The monthly math works out like this: estimated rent of $3,768 against a total monthly payment of $3,568 — principal and interest of $2,762, insurance of $180, and HOA fees of $626 — leaves $200 in monthly cash flow. That's not a margin that survives a vacancy month without a reserve, but it's positive, which is genuinely uncommon in a market where the city average cash-on-cash is 0.0%.

The $626 HOA fee is the biggest variable to watch. It's high relative to the rent, consuming roughly 17% of gross income before any other expense. The offset: HOA dues here cover water, trash, cable, and internet, which typically transfer to tenants as included utilities and can support a rent premium. That's already baked into the $3,768 estimate, but it's worth confirming with comparable listings before underwriting.

The cap rate of 6.6% and net operating income of $2,962 per month are the stronger signals. A 6.6% cap rate on a $539,000 asset in coastal Southern California is not common. The debt service coverage ratio of 1.1 is barely above breakeven for a lender's comfort threshold, but it does clear it. The gross rent multiplier of 11.9 reflects reasonable pricing relative to rent — below 12 is generally considered fair value territory for income property.

Figures exclude depreciation tax benefits, which vary by individual tax situation.

The financial case here isn't about margin — it's about a cash-flow-positive entry in a market where most comparable assets don't clear that bar.

Annual return outlook

The 5-year total ROI projection of 10.6% draws from three sources, with mortgage paydown doing more work than the cash flow alone suggests.

The breakdown: cash flow contributes 2.2%, an estimated annual appreciation rate of approximately 3.8% contributes another 3.8%, and mortgage paydown adds 4.5%. That paydown figure is the quiet engine here — at a 6.55% rate on a 20% down purchase, early payments are still heavily interest-weighted, but the amortization contribution still outpaces the cash-on-cash yield.

The 3.8% appreciation figure is an estimate, not a scraped historical average, so treat it as a directional input rather than a guarantee. Long Beach's coastal proximity and supply constraints provide a structural case for continued appreciation, but the specific rate is uncertain. Sensitivity matters: if appreciation runs at 2% instead of 3.8%, the 5-year ROI drops closer to 8.9%. Still positive, but the margin for error narrows.

What the 5-year picture does confirm is that this isn't a pure cash-flow play. The investor who holds this property for five years and captures all three return components — income, appreciation, and paydown — ends up in a meaningfully different position than one who evaluates it solely on the $200 monthly surplus. The compounding effect of equity buildup on a $539,000 asset, even at modest appreciation, produces dollar returns that dwarf the annual cash distributions.

How it compares to nearby for-sale listings

Five active for-sale listings in the 90815 zip with 2 bedrooms provide context on where this property sits in the local market.

5140 E Atherton is priced at $539,000, which translates to roughly $435 per square foot on 1,241 square feet. The for-sale comp median in the zip is $875,000 — this property is 38% below that median. Some of that gap reflects property type (the higher-priced comps include single-family homes), but even against the two-bedroom condo at 4144 E Mendez St listed at $617,000 for 1,184 square feet (about $521/sqft), the Atherton unit comes in meaningfully cheaper on a per-square-foot basis.

The closest size and type analog in the comp set is 7890 E Spring St Unit 11E at $485,000 for 1,101 square feet — slightly smaller and slightly cheaper, but it's also been on the market 53 days, the same as the Atherton unit. Two properties sitting at the same DOM in the same zip is a signal worth noting: either both are priced at the edge of what the market will absorb, or the 53-day mark is simply where 90815 condo buyers take their time. Either way, neither property is moving fast.

The $11,000 price reduction already taken on the Atherton unit, combined with the 53-day sit, gives a buyer a factual basis to negotiate. The tax-assessed value of $438,383 is another reference point — the current ask is 23% above assessed value, which is normal in California but frames the gap between book value and market ask.

Rental demand in this zip

Rental comp data for 2-bedroom units in the 90815 zip is limited, which introduces uncertainty into the cash-flow projection.

There are no directly comparable rentals in the 90815 zip to validate the $3,768 monthly rent estimate. That's not unusual for a specific submarket, but it does mean the income projection rests on a modeled estimate rather than active lease comparisons. Investors should pull current rental listings in adjacent zip codes and within the Sovereign Park Estates community itself before committing to the underwriting.

The $3,768 figure implies a rent-to-price ratio of roughly 0.70% — below the 1% rule threshold, which is expected in coastal California. What makes it defensible is the HOA structure: because dues cover water, trash, cable, and internet, a landlord can legitimately advertise the unit as utilities-included and price accordingly. Tenants paying $3,768 all-in for a 1,241-square-foot two-bed in Long Beach with five pools and a fitness center on-site is a plausible market position, but it needs local confirmation.

The debt service coverage ratio of 1.1 means the property covers its debt obligations with 10% to spare at the projected rent. That's a thin cushion. A 5% rent shortfall — say, actual market rent comes in at $3,580 instead of $3,768 — flips the monthly cash flow negative. Stress-testing the rent assumption before closing is the single most important diligence step on this deal.

Who this property suits + risks to weigh

This property fits a buy-and-hold investor comfortable with thin margins and a 5-year horizon, not someone underwriting for strong near-term income.

Best fit

The investor this deal suits is one who wants a foothold in coastal Southern California with a cash-flow-positive entry — rare at this price point in this market — and is willing to accept a 2.2% cash-on-cash return in exchange for the appreciation and paydown components that make the 10.6% five-year ROI work. A self-managing landlord who can keep vacancy low gets more out of this deal than one paying a property manager 8-10% of gross rent, which would erase the $200 monthly surplus entirely. The recently upgraded mechanical systems (mini-splits, water heater, circuit breaker) reduce the probability of a capital call in the first few years, which matters when margins are this thin.

Risks to weigh

The $626 HOA fee is the structural risk. It's fixed, it's high, and it doesn't compress when rent softens. If the HOA raises dues — which California HOAs can do — the cash flow turns negative before any vacancy occurs. The absence of rental comp data in the zip means the $3,768 rent estimate carries more uncertainty than a deal with 10 active comps to validate against. The 53-day market time and prior price cut suggest the seller has already absorbed some market feedback; a buyer who reads that as leverage has a factual basis for doing so. Finally, the non-owner-occupied status of the property means financing terms may differ from owner-occupant rates — confirm lender requirements before assuming the 6.55% rate applies.

This is a narrow-margin deal in a low-inventory market, best suited for a patient investor who values appreciation and equity buildup over immediate income.