739 3rd Ave S

Kent, WA 98032

$1,995,000D-

160 bd · 100.0 ba · 7,808 sqft · Built 1969 · MultiFamily · Active · 98 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $17,233/mo
• Mortgage (P&I): −$10,462
• Tax + insurance: −$3,391
• HOA: −$0
• Vac / Maint / Mgmt: −$3,619
• Net cashflow: $-239/mo
• Annual: $-2,873/yr
• Cap rate: 6.19%
• Cash-on-cash: -0.37%
• DSCR: 0.98
• 1% rule: 0.86%
• Cash to close: $558,600

Investor read

• This is a 10 × 1-bed/1-bath units multifamily listed at $2.00M.
• At list price, monthly cash flow is $-239 ($-3k/yr) — negative. Per door: $-24/mo.
• To cash-flow at today's rent, offer at most $1.96M (1.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.72M (13.6% below list).
• It's been on market 98 days — a 9% lower offer ($1.82M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.72M (13.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $14k of loan paydown is wiped out by about $60k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#109 in WA, #2,154 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: schools C-, crime F, cost of living F.
• Kent School District (urban): math 47% / reading 57% proficiency, ranked #109 of 291 in WA (top 38%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents soft (-0.7%/yr); 124 active listings in the ZIP; solid renter incomes; 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.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 2.7% in Kent — 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 $17,233/mo this rent would consume 250% of the median local household income ($83k/yr) (locally 2581% 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?
• It's been on market 98 days. Have you received any prior offers? Is the seller open to a 14% 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 1969 — 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?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.