324 3rd Ave S

Edmonds, WA 98020

$1,500,000C

35 bd · 25.0 ba · 4,296 sqft · Built 1959 · MultiFamily · Active · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $15,700/mo
• Mortgage (P&I): −$7,866
• Tax + insurance: −$1,650
• HOA: −$0
• Vac / Maint / Mgmt: −$3,297
• Net cashflow: $2,887/mo
• Annual: $34,645/yr
• Cap rate: 8.60%
• Cash-on-cash: 8.25%
• DSCR: 1.37
• 1% rule: 1.05%
• Cash to close: $420,000

Investor read

• This is a 5 × 7-bed/5.0-bath units multifamily listed at $1.50M.
• At list price, monthly cash flow is $3k ($35k/yr) — positive. Per door: $577/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($16k rent vs $1.50M).
• It's been on market 37 days — a 3% lower offer ($1.46M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.46M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $45k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#188 in WA) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A+, schools A-; Watch: crime D+, amenities F, cost of living F.
• Edmonds School District (suburban): math 54% / reading 65% proficiency, ranked #53 of 291 in WA (top 18%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.0%/yr); 118 active listings in the ZIP; 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.
• Current owner paid $650k; list at $1.50M implies a 131% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 7.0% rent growth), your $420k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 8.6% vs local median 1.3% in Edmonds — 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 $15,700/mo this rent would consume 145% of the median local household income ($130k/yr) (locally 433% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 37 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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?
• Built in 1959 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.