7615 198th St E

Frederickson, WA 98387

$399,900D+

3 bd · 3.0 ba · 2,642 sqft · Built 2004 · SingleFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,231/mo
• Mortgage (P&I): −$2,097
• Tax + insurance: −$643
• HOA: −$50
• Vac / Maint / Mgmt: −$678
• Net cashflow: $-238/mo
• Annual: $-2,854/yr
• Cap rate: 5.58%
• Cash-on-cash: -2.55%
• DSCR: 0.89
• 1% rule: 0.81%
• Cash to close: $111,972

Investor read

• This is a 3-bed/3.0-bath single-family listed at $400k.
• At list price, monthly cash flow is $-238 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $358k (10.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $323k (19.2% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $323k (19.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#197 in WA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety A+; Watch: crime D+, amenities D-, commute F.
• Bethel School District (suburban): math 47% / reading 59% proficiency, ranked #103 of 291 in WA (top 35%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Elk Plain School of Choice (570 students, 39% FRL); Liberty Middle School (936 students, 55% FRL); Graham Kapowsin High School (2,011 students, 49% FRL).
• Market conditions: Rents rising fast (+4.2%/yr); 388 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 3 sale attempts since 21y ago; this cycle's ask has dropped $100k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.6% vs local median 3.5% in Frederickson — 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 36% of the median local income ($107k/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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D 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?
• 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.