17809 120th Ave SE

McKenna, WA 98597

$825,000C

2 bd · 1.0 ba · 968 sqft · Built 1962 · MultiFamily · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,370/mo
• Mortgage (P&I): −$4,326
• Tax + insurance: −$737
• HOA: −$0
• Vac / Maint / Mgmt: −$1,758
• Net cashflow: $1,549/mo
• Annual: $18,587/yr
• Cap rate: 8.55%
• Cash-on-cash: 8.05%
• DSCR: 1.36
• 1% rule: 1.01%
• Cash to close: $231,000

Investor read

• This is a 2-bed/1.0-bath multifamily listed at $825k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $825k).
• It's been on market 30 days — a 2% lower offer ($813k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $813k (1.5% below list) — sets the bar for market timing.
• 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 67/100 on livability (#300 in WA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A-; Watch: health & safety C-, amenities F, commute F.
• Yelm School District (rural): math 48% / reading 59% proficiency, ranked #108 of 291 in WA (top 37%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Fort Stevens Elementary (511 students, 63% FRL); Yelm High School 12 (1,634 students, 45% FRL) — zoned schools average 54% FRL vs 34% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+5.8%/yr); 431 active listings in the ZIP; solid renter incomes; 1,222 units permitted in Thurston County in 2024 (508 in 5+ unit buildings).
• Thurston County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 5.8% rent growth), your $231k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 8.5% vs local median 3.8% in McKenna — 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 $8,370/mo this rent would consume 109% of the median local household income ($92k/yr) (locally 259% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1962 — 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.
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.