34027 1st Pl S

Federal Way, WA 98003

$845,000D

8 bd · 4.0 ba · 3,056 sqft · Built 1979 · MultiFamily · Active · 90 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,145/mo
• Mortgage (P&I): −$4,431
• Tax + insurance: −$1,058
• HOA: −$677
• Vac / Maint / Mgmt: −$1,500
• Net cashflow: $-522/mo
• Annual: $-6,263/yr
• Cap rate: 5.55%
• Cash-on-cash: -2.65%
• DSCR: 0.88
• 1% rule: 0.85%
• Cash to close: $236,600

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $845k.
• At list price, monthly cash flow is $-522 ($-6k/yr) — negative. Per door: $-130/mo.
• To cash-flow at today's rent, offer at most $753k (10.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $714k (15.4% below list).
• It's been on market 90 days — a 6% lower offer ($794k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $714k (15.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $25k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#221 in WA) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A+; Watch: schools C-, crime F, cost of living F.
• Federal Way School District (suburban): math 35% / reading 47% proficiency, ranked #207 of 291 in WA (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.3%/yr); 231 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.
• Current owner paid $120k; list at $845k implies a 604% gain — meaningful room to come down on a strong offer.
• Cap rate 5.6% vs local median 2.7% in Federal Way — 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 $7,145/mo this rent would consume 114% of the median local household income ($75k/yr) (locally 2895% 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 90 days. Have you received any prior offers? Is the seller open to a 15% 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 1979 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.