3713 SW 338th Pl

Federal Way, WA 98023

$399,000D

3 bd · 2.0 ba · 1,620 sqft · Built 1978 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,926/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$579
• HOA: −$0
• Vac / Maint / Mgmt: −$615
• Net cashflow: $-360/mo
• Annual: $-4,318/yr
• Cap rate: 5.21%
• Cash-on-cash: -3.87%
• DSCR: 0.83
• 1% rule: 0.73%
• Cash to close: $111,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $399k.
• At list price, monthly cash flow is $-360 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $335k (15.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $293k (26.7% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $293k (26.7% 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 71/100 on livability (#221 in WA) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A+; Watch: 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.
• Zoned schools: Brigadoon Elementary School (353 students, 64% FRL); Decatur High School (1,327 students, 64% FRL) — zoned schools average 64% FRL vs 48% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 234 active listings in the ZIP; 36 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• Cap rate 5.2% 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.
• This rent runs 33% of the median local income ($105k/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?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.
• 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.