226 Cedar Ave S

North Bend, WA 98045

$1,495,000B

72 bd · 48.0 ba · 5,280 sqft · Built 1967 · MultiFamily · Pending · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,471/mo
• Mortgage (P&I): −$7,840
• Tax + insurance: −$2,029
• HOA: −$0
• Vac / Maint / Mgmt: −$3,879
• Net cashflow: $4,723/mo
• Annual: $56,677/yr
• Cap rate: 10.18%
• Cash-on-cash: 13.89%
• DSCR: 1.62
• 1% rule: 1.24%
• Cash to close: $418,600

Investor read

• This is a 8 × 2-bed/1.5-bath units multifamily listed at $1.50M.
• At list price, monthly cash flow is $5k ($57k/yr) — positive. Per door: $590/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $1.50M).
• It's been on market 21 days — a 2% lower offer ($1.47M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.47M (1.5% 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 (#187 in WA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime B+; Watch: amenities C-, commute F, cost of living F.
• Snoqualmie Valley School District (town): math 73% / reading 80% proficiency, ranked #5 of 291 in WA (top 2%) — strong family-tenant draw, lease renewals of 3-5y typical; only 10% free/reduced lunch — higher-income household profile.
• Zoned schools: North Bend Elementary School (456 students, 18% FRL); Mount Si High School (2,081 students, 13% FRL).
• Watch-outs: flood insurance adds $122/mo.
• Market conditions: Rents rising fast (+7.8%/yr); 147 active listings in the ZIP; high-income renter base; 10,555 units permitted in King County in 2024 (7,119 in 5+ unit buildings).
• King County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 3y 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.
• At projected returns (-3.0% appreciation + 7.8% rent growth), your $419k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.2% vs local median 1.5% in North Bend — 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 $18,471/mo this rent would consume 126% of the median local household income ($176k/yr) (locally 281% 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?
• Built in 1967 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.