8734-8736 Burnet Avenue

01The Deal

A 20-unit, 1990-built tri-level townhome complex under contract at the seller's counter of $4,100,000 all cash (~$205,000/unit; the MLS list price was $3,950,000). The mix is 12 two-bedroom (1,040 SF) and 8 three-bedroom (1,380–1,530 SF) townhomes, each with an attached 2-car garage; 5 units are currently vacant. The County Assessor records all 20 units as separate condominium parcels (APNs 2654-007-167 to -186), built 1990; per the listing the homeowners' association ("8734 Burnet HOA") went dormant when the seller consolidated all 20 units in 2008. The business plan is a for-sale condominium sell-out: acquire the building at a rental basis (~$205,000/unit), restore the condominium structure, renovate, and sell the 20 units individually at retail condo pricing (~$495K–$680K each). In-place rents carry the property during the sell-out — this is a merchant-build / for-sale play, not a long-term rental hold.

PSA fully executed; escrow open. All cash, property sold as-is / where-is with no seller repairs, 3% deposit ($123,000). Buyer assumes the City's Report (9A) work after closing. Escrow: Atlantic Escrow (Ruby Tsai); Title: Fidelity Title (Nicole Menard). DD package received May 21, 2026. — Sourced from the Fully Executed PSA (DocuSign envelope 1ED3F854) and seller DD delivery.

02The Plan: Condominium Sell-Out

This is the business plan — buy wholesale, sell retail. The entire return is the spread between the rental-basis acquisition (~$205K/unit) and the for-sale value of a renovated condominium (~$495K for a 2BR, ~$625K for a 3BR). The 20 units are already recorded as separate condominium parcels at the County Assessor (APNs 2654-007-167 to -186), so the path is reviving the dormant 8734 Burnet HOA and selling the units individually — not stabilizing and holding a rental. In-place rents (Section 08) simply carry the property while the units are renovated and sold off. How the spread is captured depends on the legal path: the Assessor and listing indicate the subdivision is already in place — a fast HOA reactivation — but if the title report shows otherwise it becomes a full Tentative-Tract-Map conversion. The model in Section 04 lets you compare both.

03For-Sale Comp Analysis

Finished-product evidence: what renovated condominiums trade for in North Hills (91343). The value argument is finished-condo $/SF by unit type — the same $/SF that drives the exit values in the model.

Closed Sales — North Hills Condos (2025)

Seven closed condo sales in 91343, 2025. The 2BR comps (8601 Burnet, 9834 Sepulveda) and mid-size 3BR comps (9438 Burnet, 9431 Sepulveda) are the closest profile match to the subject's units.

Active Listings & New-Construction Competition

North Hills median ~$453-463/SF (Feb-Apr 2026). Comp set is preliminary, from public listing aggregators — expand and verify with full MLS closed sales before removing contingencies.

04Interactive Sell-Out Return Model

Pick a legal path and a scenario. The $4.1M price, the 12×2BR / 8×3BR mix and the Assessor square footage are Sourced and fixed; exit values are computed as each type's total SF × an editable $/SF. Every other figure is an editable Assumption that recomputes the return live.

05Unit Schedule & Rent Roll

All 20 units are separate condominium parcels at the LA County Assessor — two identical 10-unit buildings, built 1990. Per-unit square footage is from Assessor records; the Est. Exit Value column is each unit's SF × the sell-out model's current exit $/SF — i.e., the retail price each condo is sold for. For in-place vs. market rent and the interim rental carry, see Section 08. The five vacant units (per the certified April 2026 rent roll) are all in the 8736 building — the natural first units to deliver and sell: #1, #2, #3, #4, #6.

Est. Exit Value = each unit's Assessor square footage × the model's current exit $/SF (—) — it ties exactly to the model sellout. Rent column populates from the seller's certified rent roll.

06Reactivation vs. Full Conversion

Same building, same ~$10.9M sellout — the two legal paths differ only in cost, time, and risk. Reactivating an existing recorded subdivision is far faster and cheaper than a ground-up conversion. Which one applies is settled by the preliminary title report.

Generated live from the model. Tap the path / scenario buttons in section 04 to load any combination into the interactive model.

07LP Investor Waterfall (condo path)

How the deal's equity and profit are distributed between the LP investors (the equity raise) and the GP / sponsor — return of capital, then a preferred return, then a residual split (the sponsor promote). The three structure inputs are editable; capital and profit flow live from the model — change the path or scenario in section 04 and this updates with it.

Share of total project profit — LP investors vs. GP/sponsor (carried interest / promote).

Standard structure shown: the preferred return accrues pari passu on all equity (LP and GP co-investment), then residual profit splits with a sponsor promote. Preferred return is simple (non-compounded) over the hold period. Adjust the three inputs to the actual partnership terms. Illustrative only — not an offer of securities.

08Interim Income & Current Operations

This is the income you acquire on day one — the in-place rents that carry the property during the condominium sell-out (Section 02), and the downside fallback if absorption stalls. The full DD package is in hand: certified April 2026 rent roll, 2022-2025 owner income statements, recorded leases, property tax bills, insurance binder, title work, and the LAAA As-Is Model (June 2026). The acquisition basis is $4,100,000 — $205,000/unit, $170/SF. The As-Is package underwrites a 6.33% Current cap (leasing the 5 vacants at potential) and a 10.11% Pro Forma cap at portfolio potential rents — the rental fallback shown lower in this section. The for-sale sell-out is the plan; this is the floor under it.

Acquisition & In-Place Snapshot

Rent Roll by Type — Current vs Potential Per the LAAA As-Is Model, June 2026

As-Is Model rollup. Scheduled gross rents: Current $40,765/mo ($489,180/yr; occupied at in-place + vacants imputed at potential); Potential $54,780/mo ($657,360/yr at full portfolio potential). Against the in-place collected $27,070/mo ($324,840/yr), the gap to portfolio potential is +$27,710/mo, +$332,520/yr (+102%). The for-sale comp set in Section 09 supports higher market rents than the As-Is uses (2BR $3,075, 3BR $3,750 midpoints) — the As-Is therefore underwrites conservatively. All 5 vacancies are in the 8736 building (units 1, 2, 3, 4, 6). Three Section 8 units (8734-4, 8734-8, 8736-8); 8734-4 (Tiani Potts) is delinquent on her $854 tenant portion — eviction recommended in the first 90 days.

Current Rent Roll — Unit Detail April 2026, seller-certified

13 of 15 occupied leases are month-to-month — original terms expired between 2009 and 2017. Only 8734-1 (through 7/26) and 8736-5 (through 9/26) remain on multi-year leases. Bath counts per the certified rent roll (all 2.5BA); Assessor records in the Unit Schedule (Section 05) show 3BA — field verify on inspection. Potential rents per the LAAA As-Is Model: $2,600 for 2BR (1,040 SF), $2,900 for 3BR (1,380 SF), $2,995 for 3BR (1,500-1,530 SF). Security deposits omitted here for space — see the downloadable workbook for the full DD pack. Source: Burnet Apt - Rent Roll 2026.xls (seller, April 2026) + 8734-8736 Burnet As-Is Model.pdf (LAAA, June 2026).

Historical Operating North Hills Wong LLC annual income statements, 2022-2025

The 2023 and 2025 expense spikes are largely non-recurring — 2023 carried $27,695 in electrical upgrades (panels replaced) and $15,251 in repairs; 2025 included $35,806 in repairs and $20,344 in plumbing. Both years coincided with elevated vacancy at the 8736 building (income drift down). Stabilized expense ratio normalizes to ~25-30% on market rents — line-item breakdown below.

2025 Operating Expense Detail Actuals vs. stabilized pro forma

Stabilized OpEx essentially matches 2025 actuals in dollar terms — the expense story is not cost-cutting, it's revenue acceleration. The 78% expense ratio compresses to ~34% as income ramps from $269K (2025 depressed occupancy) to $638K EGI (As-Is Pro Forma). R&M normalization carries the bulk of the offset (2025's $56K combined repairs + plumbing was non-recurring catch-up). Source: North Hills Wong LLC Annual Income Statements 2022-2025.xlsx; see Operating Statement below for the As-Is summary (June 2026).

Operating Statement — LAAA As-Is Model Current vs Pro Forma, June 2026 · rental-hold fallback — not the base plan

Mirrors the LAAA As-Is Model dated As of June 2026. Current = leased rents + vacants imputed at potential; Pro Forma = all units at As-Is potential. Building is 1990-vintage — not subject to LA RSO (pre-1978 cutoff); AB 1482 governs rent caps. Source: 8734-8736 Burnet As-Is Model.pdf, Escrows/8734-8736 Burnet Ave/Due Diligence/Burnet As Is/.

Fallback all-cash IRR assumes acquisition $4.10M + $50K closing + $200K initial turnover & reno on the 5 vacant units, NOI ramp from the As-Is Current ($259K) to the As-Is Pro Forma ($414K) over five years, exit Y5 at 6.0% cap less 4% selling costs. The base plan — the condominium sell-out in Sections 02–07 — targets a higher return over a much shorter (~20-month) hold; these rental figures are the downside reference only.

Sourced Fully Executed PSA · April 2026 rent roll (seller-certified) · North Hills Wong LLC annual income statements 2022-2025 · LAAA team rent comp report (8734-8736 Burnet Ave) · LA County Assessor records.

09Rent Comps

The rent comp set was assembled by the LAAA team in May 2026. The closest match is 8958 Burnet Ave — same street, 1989 vintage, townhouse format with 2-car garage. Comp midpoints support 2BR $3,075 / 3BR $3,750. Section 08's interim pro forma is anchored to the more conservative LAAA As-Is Model (June 2026), which underwrites 2BR at $2,600 and 3BR at $2,900–$2,995 — the gap between As-Is potentials and these comp midpoints is upside the rental fallback leaves on the table.

2 Bed / 2.5 Bath ~1,040 SF subject units · 12 of 20

3 Bed / 2.5 Bath ~1,380-1,530 SF subject units · 8 of 20

Sourced LAAA team rent comp report — 8734-8736 Burnet Ave Rent Comps.html, May 2026. Market context: RentCafe, ApartmentList. All comps independently verified against active listings on Apartments.com, Zillow, and CoStar.

10Key Risks & Contingencies

These items drive the spread between the cases — and the first one is the master variable.

11Sell-Out Execution & Action Items

Execution priorities for the condominium sell-out — sequenced from the contingency window through unit closings:

• Order the preliminary title report immediately — confirm the recorded condominium plan / subdivision map (APNs 167-186) and CC&Rs. This settles the master variable: HOA reactivation (the plan) vs. a full Tentative-Tract-Map conversion.
• Confirm / revive the 8734 Burnet HOA (CA Secretary of State / FTB) — reinstate the dormant association, update CC&Rs, and budget the ~$160K reactivation cost; engage condo/HOA counsel and a DRE consultant on the public report path.
• Price the renovation & common-area scope with a GC — per-unit refresh (kitchens, baths, finishes) plus exterior/common area; electrical panels are already replaced. Lock the budget that drives the model's exit $/SF.
• Obtain the City's Report (9A) and price the required work — placeholder $150K; scope must be confirmed in the 12-day contingency window before the deposit goes hard.
• Build the unit-by-unit sell-out / absorption schedule — sequence which units deliver vacant first (the 5 existing vacancies in 8736 lead); set release pricing against the for-sale comps (Section 03) and stage releases against Valley Villas' 75-unit competition.
• Plan tenant delivery — for occupied units, schedule turnover with proper notice and non-RSO relocation; prioritize the deepest below-market / long-tenancy units. Initiate the 8734-4 (Tiani Potts) S8 delinquency / eviction with LAHD.
• Run the interim rental as carry, not as a hold — keep occupied units paying to cover taxes/insurance/debt service during the sell-out; only re-lease vacants if a unit isn't being readied for sale.
• Engage a sell-out listing/marketing program (individual condo MLS listings, lender pre-approval relationships); line up construction-to-sale financing draw/release mechanics tied to unit closings.
• Loss-runs & insurance — binder $17,752 (AmTrust, expires 10/09/25); place a builder's-risk / renovation policy for the sell-out period.