Unlocking the Rental Income Potential of a 4-Unit Property in Bell Gardens
Is this under-rented property a sleeping giant? Let’s look at the numbers.

Bell Gardens, a well-located city in Southeast Los Angeles County, continues to attract attention from multifamily investors. With increasing demand for rental housing and constrained supply, properties with under-market rents present some of the strongest long-term upside—especially when paired with smart financing.

Let’s evaluate a 4-unit apartment in Bell Gardens priced at $950,000, with a mix of legacy and market-rate tenants, and explore its income potential, financing costs, and future upside.

---

🔢 Current Rental Income Snapshot

Current monthly rents:

• Unit 1: $728
• Unit 2: $832
• Unit 3: $832
• Unit 4: $2,345

Total Monthly Income: $4,737
Total Annual Gross Income: $56,844

At first glance, the rents appear low for the area, indicating long-term tenants likely covered by rent stabilization.

---

💰 Market Rent Potential

The greatest opportunity lies in turnover and upgrades. If just Unit 3 turns over and is renovated to market standards, it could rent for an estimated $2,350/month. Here’s what the revised monthly income could look like:

• Unit 1 (current): $728
• Unit 2 (current): $832
• Unit 3 (future): $2,350
• Unit 4 (current): $2,345

Potential Monthly Rent: $6,255
Potential Annual Gross Rent: $75,060
Annual Upside from Just One Turnover: +$18,216

If multiple units turn over in the coming years, the property’s income could easily exceed $90,000+ annually.

---

🏦 Financing Details

Assuming a purchase price of $950,000 and 10% down payment:

• Loan Amount: $855,000
• Interest Rate: 7.25% (30-year fixed)
• Principal & Interest: $5,832.61
• Property Taxes: $989.58
• Homeowner’s Insurance: $277.08
• Mortgage Insurance: $399.00

Total Monthly Housing Payment: $7,498.27
Total Annual Housing Expense: $89,979.24

---

📊 Short-Term Cash Flow Outlook

• Current Rent Income: $56,844/year
• Total Annual Expense: $89,979/year
• Initial Shortfall: –$33,135/year (approx. –$2,761/month)
  • Note: This shortfall narrows with each unit turnover and rent adjustment.

---

📈 Long-Term Appreciation Outlook (9-Year Hold)

Assuming an average annual inflation/appreciation rate of 4%, here’s what the property could be worth in 9 years:

Future Value = $950,000 × (1.04⁹) ≈ $1,351,147

That’s a projected gain of $401,147 in equity—not including loan paydown or rental income increases. And if the rents reach market levels during the hold, positive cash flow could replace the early shortfall.

---

✅ Investor Takeaways

• Current Gross Rents: $4,737/month
• Market Potential (1 unit upgraded): $6,255/month
• Future Value (9 years @ 4% annual growth): ~$1.35M
• Monthly Housing Cost: $7,498.27
• Strategy: Value-add + appreciation + principal paydown

---

📌 Final Thoughts

This Bell Gardens 4-plex is a classic value-add play: below-market rents, stabilized tenants, and a path to long-term equity and cash flow. While the property may run negative cash flow today, even a single turnover unlocks thousands in annual income—and with time, the investment can shift from breakeven to income-producing.

For investors with a 5–10 year horizon and the ability to manage tenant transitions, this property could be a long-term win.

David Delgado – NMLS #349079
President/CEO
Main Office (866) 587-6927
Freedom Choice Lending
NMLS #1998153