1405 Martin Luther King Jr Way

Tacoma, WA 98405

$1,350,000B

100 bd · 100.0 ba · 5,680 sqft · Built 1968 · MultiFamily · Active · 160 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $22,408/mo
• Mortgage (P&I): −$7,080
• Tax + insurance: −$1,546
• HOA: −$0
• Vac / Maint / Mgmt: −$4,706
• Net cashflow: $9,077/mo
• Annual: $108,923/yr
• Cap rate: 14.36%
• Cash-on-cash: 28.82%
• DSCR: 2.28
• 1% rule: 1.66%
• Cash to close: $378,000

Investor read

• This is a 10 × 10-bed/10.0-bath units multifamily listed at $1.35M.
• At list price, monthly cash flow is $9k ($109k/yr) — positive. Per door: $908/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($22k rent vs $1.35M).
• It's been on market 160 days — a 12% lower offer ($1.19M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.19M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $40k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#127 in WA, #2,535 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living D, crime F.
• Tacoma School District (urban): math 40% / reading 53% proficiency, ranked #169 of 291 in WA (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+3.9%/yr); 122 active listings in the ZIP; solid renter incomes; 3,209 units permitted in Pierce County in 2024 (1,269 in 5+ unit buildings).
• Pierce County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 3y ago; this cycle's ask has dropped $100k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.9% rent growth), your $378k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.4% vs local median 2.9% in Tacoma — 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 $22,408/mo this rent would consume 354% of the median local household income ($76k/yr) (locally 1313% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 160 days. Have you received any prior offers? Is the seller open to a 12% 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 1968 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• Schools are B-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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?