2406 & 2410 Callow Rd

Lake Stevens, WA 98258

$1,150,000D

4 bd · 3.0 ba · 2,400 sqft · Built 1990 · MultiFamily · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,047/mo
• Mortgage (P&I): −$6,031
• Tax + insurance: −$996
• HOA: −$0
• Vac / Maint / Mgmt: −$2,110
• Net cashflow: $911/mo
• Annual: $10,928/yr
• Cap rate: 7.24%
• Cash-on-cash: 3.39%
• DSCR: 1.15
• 1% rule: 0.87%
• Cash to close: $322,000

Investor read

• This is a 2×2bd/1.5ba + 2×3bd/1.5ba units multifamily listed at $1.15M.
• At list price, monthly cash flow is $911 ($11k/yr) — positive. Per door: $228/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.00M (12.6% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $1.00M (12.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $34k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#51 in WA, #917 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+; Watch: amenities C-, cost of living F.
• Lake Stevens School District (suburban): math 57% / reading 70% proficiency, ranked #31 of 291 in WA (top 11%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Highland Elementary (590 students, 26% FRL); Lake Stevens Sr High School (2,140 students, 31% FRL).
• Market conditions: Rents flat; 418 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 3,982 units permitted in Snohomish County in 2024 (1,492 in 5+ unit buildings).
• Snohomish County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask is 100% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $125k; list at $1.15M implies a 820% gain — meaningful room to come down on a strong offer.
• Cap rate 7.2% vs local median 2.8% in Lake Stevens — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $10,047/mo this rent would consume 97% of the median local household income ($124k/yr) (locally 786% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.