REALLA
AI REAL ESTATE INTELLIGENCE
530 Wickliffe Dr
Pasadena, CA 91104 · Single Family
LIVE REPORT · PIPELINE · RentCast · Census · FRED
1

Investment Decision

Realla Model
PASS / NEGOTIATE
Data-driven verdict
DSCR 0.31x · cash flow Y1 -$36,584 · prob-weighted IRR -7.2%
5
Conviction / 100
Est. Market Value (AVM)
$926,000
Range $799K - $1054K
Ask / List Price
—
vs AVM
NOI (Y1)
$16,531
Cap 1.8%
DSCR (Y1)
0.31x
Lender needs 1.20x+
Annual Cash Flow
-$36,584
CoC -15.8%
Prob-Weighted IRR
-7.2%
4-scenario DCF, 5-yr

Why This Deal Realla Model

Established Market Fundamentals
Pasadena median HH income $93.9k, population stable at 35.9k. Safe, educated demographic for long-term hold.
Undervalued Relative to Recent Comps
Property at AVM $926k; recent comp sale (Jan 2025) at $1.138M. Modeled basis ≈19% discount to recent transaction.
Loan Paydown Equity Potential
Even with negative cash flow, principal paydown builds $191k equity over 5 years (stable market scenario exit value $1.073M).
Infrastructure Growth Upside Path
20% probability scenario models 5.5% appreciation + 4% rent growth → 4.7% IRR and $1.21M exit value. Requires rent normalization.

Action Plan Realla Model

Step 1
Verify Client Intent & Financing Reality
Confirm: Is this a primary residence or investment property? If investment, client must have cash reserves to cover $36.6k Y1 cash flow deficit or accept conventional financing rejection.
Step 2
Negotiate Purchase Price Down to $800k–$850k
Current AVM $926k with DSCR 0.31x is unfinanceable. Target $800k drops DSCR to 0.36x (still fails but narrower gap). At $750k, approaches viability.
Step 3
Validate Rental Income & Market Rent Potential
Current rent $3,470/mo is per broker data. Order independent rent comp analysis for 2BR/1BA in Pasadena. Verify if $6,958 break-even rent is realistic in 3–5 years.
Step 4
Confirm Financing Path (If Investment)
DSCR failure on conventional loans. Approach portfolio lenders, SBA programs, or require 50%+ cash down. Full cash purchase eliminates debt-service drag.
2

Property Snapshot

RentCast
Type
Single Family
Beds / Baths
2 / 1
Living Area
1,243 sqft
Lot
5,035 sqft
Year Built
1926
Zoning
PSR6
APN
5838-027-005
County
Los Angeles
Last Sale
2025-01-24
Last Sale Price
$1,138,000
3

Pricing & Comparables

RentCast AVM

Valuation

AI Fair Value (AVM)$926,000
Value Range$799,000 – $1,054,000
Ask—
VerdictAVM-BASED

Negotiation Levers Realla Model

Recent Market Comp (Jan 2025) $1.138M vs. AVM $926k
Recent transaction 23% above AVM raises questions on market timing or condition. Use as ceiling anchor; argue for AVM floor or lower.
DSCR Failure & Financing Friction
Conventional lenders reject at current ask. Buyer pool shrinks to all-cash or portfolio lenders. Reduced competition justifies 8–12% price reduction.
Negative Carry & Year-1 Cash Burn
Breaking even requires $6,958/mo rent vs. $3,470 current. Buyer must fund $36.6k annual loss or refinance/sell. Warrants 5–8% markdown.
Pasadena Brand & Demographics
Median HH income $93.9k, low unemployment (4.8%), established neighborhood. Justifies modest 2–3% premium in stable market.
Lot Size & Land Value (5,035 sqft)
Larger lot in urban Pasadena relatively rare. If zoning permits ADU or development upside, can command 3–5% premium.
Historic Character & Scarcity (Built 1926)
Vintage Pasadena homes valued by lifestyle/architecture buyers. If condition is good, adds 2–3% over comparable newer builds.
Comp (Listing)SqFtPrice$/SFDistMatch
380 Dearborn St, Pasadena, CA 91104 2/11244$1,015,000$8160.31 mi99%
466 Wickliffe Dr, Pasadena, CA 91104 2/11305$799,000$6120.07 mi99%
1166 N El Molino Ave, Pasadena, CA 91104 2/11232$1,150,000$9330.64 mi99%
535 E Howard St, Pasadena, CA 91104 2/11108$775,000$6990.17 mi98%
1374 Palm Ter, Pasadena, CA 91104 2/11138$998,000$8770.44 mi98%
1191 Sunset Ave, Pasadena, CA 91103 2/11204$820,000$6811.07 mi98%
RentCast AVM comps are listing prices, not closed sales.
4

Investment Underwriting

Realla Model

Income & Expenses (Y1)

Gross Scheduled Rent$41,640
Vacancy (5%)-$2,082
Property Taxes-$9,572
Insurance-$3,056
Maintenance & Repairs-$5,834
Property Management (8%)-$3,165
Utilities-$600
Other / Reserves-$800
NOI$16,531

Financing & Returns

Purchase Basis$926,000
Down (25%)$231,500
Rate (fred)6.58%
Debt Service$53,116/yr
Cap Rate1.8%
DSCR0.31x — FAIL (needs 1.20x)
Annual Cash Flow-$36,584
Break-even rent ≈ $6,958/mo vs current estimate $3,470/mo.

Deal Killers Realla Model

Unfinanceable at Modeled Price (DSCR 0.31x)
Conventional lenders require 1.20x DSCR minimum. At $926k purchase + $3,470 rent, deal fails by 73%. Requires portfolio lender, cash, or $150k+ price drop.
Negative Probability-Weighted IRR (-7.2%)
Across all scenarios (weighted by probability), 5-yr return is -7.2%. Only 20% upside path reaches +4.7% IRR; base case (45% prob) is -3.9%.
Severe Year-1 Cash Flow Drain (-$36.6k)
Investor must fund $36.6k loss in first year alone. With 25% down payment ($231.5k), this consumes 15.8% of equity annually. Requires deep reserves or equity injection.

Improve Returns Realla Model

Negotiate Purchase Price to $750k–$800k
Each $50k price cut improves Y1 cash flow by ~$3.3k (via lower debt service) and DSCR by 0.04x. Target: achieve ≥0.40x DSCR and ≤-$20k Y1 burn.
Increase Down Payment to 35–40%
Raising down payment from 25% ($231.5k) to 40% ($370k) cuts loan amount to $556k, improving debt service to $3,540/mo and Y1 cash flow to -$18.8k.
Source Portfolio Lender at Lower Rate (6.0% vs. 6.58%)
Portfolio lenders may offer 6.0–6.25% rates. 50 bps cut drops monthly PI from $4,426 to $4,168; Y1 cash flow improves $3k annually.
Model Strategic Rent Increase (Value-Add Improvements)
Breaking even requires rent to grow from $3,470 to $6,958/mo (100% increase). Conservative upside: improve property to command +$500–$800/mo over 18 months.
5

Scenario Analysis

Realla Model
ScenarioProbApprecExit5-yr IRRSignal
Infrastructure Growth
20%5.5%/yr$1,210,2454.7%ACCEPTABLE
Stable Market
45%3.0%/yr$1,073,488-3.9%CAUTION
Slower Economy
25%1.0%/yr$973,235-12.5%CAUTION
Stress Scenario
10%-2.0%/yr$837,031-32.7%CAUTION

Projected Value (5-yr)

Downside$837,031
Current$926,000
Base$1,073,488
Upside$1,210,245

Equity Buildup (Base)

Initial Equity$231,500
Year-5 Value$1,073,488
Year-5 Loan Balance-$650,723
Year-5 Equity$422,764 (+83%)

Future Value Drivers Realla Model

Rent Growth Rate (Modeled 2–4% annually)
Base case 3% annual rent growth; break-even rent $6,958 requires 8+ years of 4% compound growth. Primary lever for positive long-term returns.
Home Price Appreciation (Modeled 1–5.5% annually)
Infrastructure Growth scenario (20% prob): 5.5% apprec. → $1.21M exit in 5 years. Stable Market (45% prob): 3% apprec. → $1.07M. Downside scenarios flat or negative.
Interest Rate Environment & Buyer Demand
Current FRED rate 6.58%. If rates fall to 5.5%, buyer demand rises, supporting both apprec. and rent growth. If rates rise, both metrics contract.
Local Supply Constraint (Median Days on Market 23)
Quick absorption (23 days) suggests tight inventory. If supply remains constrained and demand stable, supports 3%+ annual apprec. If new inventory surge, risk apprec. flattens.

Future Outlook — CONDITIONAL PASS (NEGOTIATE HARD)

Deal is structurally negative-return at current pricing ($926k ask, $3,470 rent). Fails financing (DSCR 0.31x) and yields -7.2% IRR across all scenarios.
Upside path exists only if: (1) purchase price negotiates to $750–800k, (2) rent grows to $5k–5.5k over 3 years (plausible but not guaranteed), (3) buyer has $50k+ annual reserve.
Primary appeal: equity buildup via principal paydown (5-yr equity growth +82.6%) and long-term appreciation in supply-constrained Pasadena market (median sale price $1.325M, 23-day DOM).
Risk: 55% of scenarios (Stable + Slower + Stress) return negative IRR. Buyer must be comfortable with 7–10 year hold and willingness to fund ongoing negative cash flow.
6

Strategy & Best Use

Realla Model
LONG-TERM HOLD + RENTAL INCOME
Model-scored best strategy
4.8
Score / 10
StrategyReturn/yrRiskScore
Long-Term Hold + Rental Income ✓ BEST
Score 4.8/10, 5-yr return -3.9%; best path if buyer absorbs negative carry and targets 7+ yr hold for apprec. + equity buildup. · Equity grows 82.6% over 5 years ($231.5k → $422.8k) via principal paydown; long-term apprec. (3% base case) supports eventual refinance or sale. · Requires robust reserves ($30k–$50k minimum) and realistic rent growth assumptions (3–4% annually) to reach break-even and positive IRR by year 7–8.
-3.9%Medium
4.8
Short-Term Rental (STR)
Score 3.4/10, 5-yr return -5.3% (vs. -3.9% long-hold); underperforms due to management overhead, vacancy risk, and local STR regulation risk. · Nightly STR rent ($115–$130 imputed from annual $3,470 market rent) insufficient to cover debt service ($146/day) after cleaning, platform fees, insurance. · Not recommended unless property is in high-tourist area or owner can command $150+/night (no evidence in Pasadena data).
-5.3%Medium
3.4
Buy, Improve & Refinance
Score 3.4/10, 5-yr return -1.6%; improves modestly vs. pure hold via strategic reno, but net improvement only 2.3% (−1.6% vs. −3.9%). · Assumes $15k–$30k cosmetic upgrade yields $400–$600/mo rent growth; refi at improved appraisal extracts partial equity. Tight margins for effort. · Viable only if purchase price drops to $800k and buyer secures portfolio lender willing to refi after 12-month seasoning.
-1.6%Medium
3.4
BRRRR Strategy
Score 2.8/10, 5-yr return -1.6%; similar math to Buy/Improve/Refi but requires full rehab ($40k–$60k+) to reach rental optimization target. · 1926 vintage property on 5,035 sqft lot suggests mechanical/structural deferred maintenance risk; full rehab budgets often exceed $75k for vintage homes. · Not recommended unless structural inspection confirms low rehab cost AND purchase price ≤$750k (leaves refi headroom).
-1.6%Medium
2.8
Fix & Flip
Score 2.5/10, 5-yr return −57.5% (severe loss); high holding cost (6–9 mo carry on 6.58% debt) + reno risk + market timing risk overwhelm appreciation. · Flip profit requires 15–20% ARV upside. Pasadena median appreciation 3%/yr ≈ 7.5% over 2.5 years. Reno + carrying costs (15%–20% of ARV) exceed gains. · Strongly not recommended unless buyer owns general contractor license, project management expertise, and access to off-market discounted inventory.
-57.5%High
2.5

Why This Strategy Realla Model

Long-Term Hold + Rental Income (Highest-Ranked Strategy)
Score 4.8/10, 5-yr return -3.9% (vs. -5.3% STR, -57.5% Fix & Flip). Best path if buyer can absorb negative carry and is committed to 7+ year hold for appreciation + rent growth.
Pasadena Market Fundamentals Support Hold Thesis
Established demographics, low unemployment (4.8%), median HH income $93.9k. Stable rental pool and slow-but-steady price appreciation typical for this cohort.
NOT Suitable for Quick Flip or STR Strategy
Fix & Flip returns -57.5% (high reno costs + holding periods outpace appreciation). STR returns -5.3% (occupancy risk + management overhead undermine small rent base).
Only Viable if Client Accepts PRINCIPAL STRATEGY: Buy & Hold for Equity Buildup, Not Cash Flow
This property does NOT cash-flow. It works only if buyer seeks principal paydown + long-term apprec. upside and has capital reserves. Misalignment = deal killer.

Value Creation Plan Realla Model

Step 1 · Renegotiate Entry Price: Target $800k (−13.6% from $926k AVM)Justify via DSCR failure (0.31x vs. 1.20x required), negative Y1 cash flow (-$36.6k), and recent comp timing risk. At $800k, DSCR improves to ~0.36x, Y1 cash flow to ~-$28k.
Step 2 · Secure Non-Conforming or Portfolio Financing (6.25% vs. 6.58%)Conventional loans will reject at DSCR 0.31x–0.36x. Approach portfolio lenders, hard-money, or require 40%+ down payment ($318k) to improve debt coverage ratio.
Step 3 · Fund 12-Month Cash Reserve Before ClosingWith Y1 burn estimated at $20k–$36k annually, buyer must accumulate $30k–$40k liquid reserve post-down-payment. Failure to reserve = forced sale or default.
Step 4 · Execute Modest Value-Add: Rent Optimization (Year 1–2)Target small improvements (cosmetic reno, landscaping, staging) to increase rent from $3,470 to $4,000–$4,200/mo. Each $100/mo rent increase = $1,200 annual income and $1,600 loan value.
Step 5 · Monitor Market Rent Trends & Refinance if Rates/Apprec. Permit (Year 3–4)If rent grows to $4,500+ and rates drop to 5.75%, refinance to improve cash flow and DSCR. Stabilized IRR improves significantly post-refinance if apprec. supports equity extraction.
7

Market & Demographics — Pasadena 91104

RentCastCensus
Median Sale Price
$1,325,000
Median $/Sq Ft
$804
Median Days on Market
23 days
Active Listings
89
Median SFR Rent
$3,470 / mo
Median Hh Income
93856
Population
35918
Median Home Value
955400
Median Gross Rent
1892
Unemployment Rate
4.8

Future Catalysts Realla Model

Metro Transit Network Expansion
LA metro ridership and transit-oriented development ongoing. Pasadena location benefits from established transit but verify recent/planned line upgrades locally.
California Housing Shortage & Inbound Migration
LA County faces structural undersupply relative to demand. Historic appreciation (median home value $955k) driven by scarcity. Sustained if inflow continues.
Institutional Rent Growth (2–4% annually modeled)
Census median gross rent ($1,892) lags SFR median rent ($3,470); gap suggests upside as inventory tightens. Verify local rent growth rates last 3 years.
Interest Rate Trajectory & Buyer Psychology
Current 30-yr fixed rate 6.58% (FRED). If rates decline, buyer demand and rents may accelerate. If rates hold, cap rates remain compressed.
Metro-level LA/Pasadena dynamics below based on census and market data. Local verification required for specific transit projects, zoning changes, and development timelines.
8

Risks & Highlights

Realla Model

Risks & Mitigations

Severe Year-1 Negative Cash Flow
Y1 cash flow is -$36.6k. Monthly rent ($3,470) covers only 78% of debt service ($4,426).
Mitigation: Require substantial capital reserve (12+ months PITI) before closing or negotiate purchase price down to ≤$800k to reach cash neutrality.
DSCR Failure (0.31x vs. 1.20x lender requirement)
Deal cannot sustain conventional debt financing. Conventional lenders will reject at modeled price and rent.
Mitigation: Explore portfolio lenders, cash purchase, or owner financing. If financing is required, purchase price must drop to ~$650k to achieve 1.2x DSCR.
Rent-to-Value Gap (1.79% cap rate vs. 6.58% debt cost)
Current market rent of $3,470/mo creates 1.79% cap rate; debt service requires $6,958/mo rent (100% gap).
Mitigation: Verify rent comps independently. Consider rent growth scenario (3-4% annual); in Stable Market, 5-yr IRR is still -3.9%.
Probability-Weighted 5-Year IRR: -7.2%
Only 20% probability of positive IRR (Infrastructure Growth scenario, +4.7%). Base case (45% prob) returns -3.9%; stress scenario loses 32.7%.
Mitigation: This is fundamentally a negative-return hold unless rental rates increase materially or purchase price negotiates lower by $100k+.
Client Intent Misalignment (Primary Residence, Not Investment)
Client profile lists 'Primary residence' as purpose, but underwriting modeled as rental investment. These are incompatible frameworks.
Mitigation: Clarify client intent immediately. If primary residence: evaluate on lifestyle fit, school district, and personal timeline—not investment metrics. If investment: reframe as negative-carry speculative hold.

Highlights

Established Pasadena neighborhood with median home value $955k and stable 4.8% unemployment
Property basis at AVM fair value ($926k) vs. recent comp sale ($1.138M) suggests 19% upside potential
5-year equity buildup modeled at 82.6% growth (from $231.5k to $422.8k) via principal paydown
Median days on market (23 days) indicates healthy buyer activity in the area
Data provenance — RentCast (property · AVM+comps · rent · market) · Census ACS (demographics) · FRED (rate) · Realla Model (underwriting · scenarios · strategy · narrative).
Not investment advice. AVM and modeled figures are estimates; verify before transacting.