621 State St

Sedro-Woolley, WA 98284

$575,000D

2 bd · 1.0 ba · 1,664 sqft · Built 1978 · MultiFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,811/mo
• Mortgage (P&I): −$3,015
• Tax + insurance: −$588
• HOA: −$0
• Vac / Maint / Mgmt: −$800
• Net cashflow: $-593/mo
• Annual: $-7,116/yr
• Cap rate: 5.06%
• Cash-on-cash: -4.42%
• DSCR: 0.80
• 1% rule: 0.66%
• Cash to close: $161,000

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $575k.
• At list price, monthly cash flow is $-593 ($-7k/yr) — negative. Per door: $-296/mo.
• To cash-flow at today's rent, offer at most $470k (18.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $381k (33.7% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $381k (33.7% below list) — sets the bar for 1% rule.
• In year one you build about $61k of equity ($4k loan paydown + $58k appreciation (10.0% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Sedro-Woolley School District (suburban): math 47% / reading 58% proficiency, ranked #117 of 291 in WA (top 40%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Mary Purcell Elementary School (410 students, 75% FRL); Cascade Middle School (697 students, 58% FRL); Sedro Woolley Senior High School (1,276 students, 49% FRL) — zoned schools average 61% FRL vs 45% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 232 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 80% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 561 units permitted in Skagit County in 2024 (270 in 5+ unit buildings).
• Skagit County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 10y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $245k; list at $575k implies a 135% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$99k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.1% vs local median 2.4% in Sedro-Woolley — 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 $3,811/mo this rent would consume 49% of the median local household income ($93k/yr) (locally 502% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• 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 1978 — 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.
• 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.