2105 N Steptoe Street #25 St #25

Kennewick, WA 99336

$124,900B

4 bd · 2.0 ba · 1,846 sqft · Built 1994 · Manufactured · Pending · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,436/mo
• Mortgage (P&I): −$655
• Tax + insurance: −$92
• HOA: −$0
• Vac / Maint / Mgmt: −$512
• Net cashflow: $1,178/mo
• Annual: $14,131/yr
• Cap rate: 17.61%
• Cash-on-cash: 40.41%
• DSCR: 2.80
• 1% rule: 1.95%
• Cash to close: $34,972

Investor read

• This is a 4-bed/2.0-bath manufactured listed at $125k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $125k).
• It's been on market 30 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#131 in WA, #2,599 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A; Watch: amenities D+, crime F.
• Richland School District (urban): math 52% / reading 64% proficiency, ranked #61 of 291 in WA (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Badger Mountain Elementary (569 students, 39% FRL); Carmichael Middle School (807 students, 55% FRL); Richland High School (2,137 students, 38% FRL) — zoned schools average 44% FRL vs 29% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.4%/yr); 292 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 44% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,532 units permitted in Benton County in 2024 (389 in 5+ unit buildings).
• Benton County population projected at +32% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 7y ago; this cycle's ask has dropped $14k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $75k; list at $125k implies a 67% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.4% rent growth), your $35k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 17.6% vs local median 3.3% in Kennewick — 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 $2,436/mo this rent would consume 47% of the median local household income ($63k/yr) (locally 2605% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.