6700 81st Ave SE

Mercer Island, WA 98040

$1,950,000D

3 bd · 3.0 ba · 2,530 sqft · Built 1977 · SingleFamily · Active · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,571/mo
• Mortgage (P&I): −$10,226
• Tax + insurance: −$1,706
• HOA: −$0
• Vac / Maint / Mgmt: −$1,590
• Net cashflow: $-5,951/mo
• Annual: $-71,410/yr
• Cap rate: 2.63%
• Cash-on-cash: -13.08%
• DSCR: 0.42
• 1% rule: 0.39%
• Cash to close: $546,000

Investor read

• This is a 3-bed/3.0-bath single-family listed at $1.95M.
• At list price, monthly cash flow is $-6k ($-71k/yr) — negative.
• To cash-flow at today's rent, offer at most $899k (53.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $757k (61.2% below list).
• It's been on market 54 days — a 3% lower offer ($1.89M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $757k (61.2% below list) — sets the bar for 1% rule.
• In year one you build about $9k of equity ($13k loan paydown + $-5k appreciation (-0.2% local appreciation)).
• Location reads 76/100 on livability (#154 in WA, #3,481 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+, employment A+; Watch: amenities F, cost of living F, health & safety F.
• Mercer Island School District (suburban): math 83% / reading 87% proficiency, ranked #1 of 291 in WA (top 0%) — strong family-tenant draw, lease renewals of 3-5y typical; only 3% free/reduced lunch — higher-income household profile.
• Zoned schools: Mercer Island High School (1,524 students, 6% FRL) — zoned schools at 6% FRL track the district average.
• Market conditions: Rents flat; 132 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 3 sale attempts since 21y ago; this cycle's ask has dropped $248k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $980k; list at $1.95M implies a 99% gain — meaningful room to come down on a strong offer.
• By year 8, paydown + projected appreciation supports a ~$113k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.6% vs local median 1.0% in Mercer Island — 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.
• This rent runs 41% of the median local income ($219k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• It's been on market 54 days. Have you received any prior offers? Is the seller open to a 61% concession, seller financing, or rate buy-down credit?
• Built in 1977 — 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?
• 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.