218 S 2nd St

Shelton, WA 98584

$165,000C

2 bd · 1.0 ba · 1,355 sqft · Built 1893 · SingleFamily · Active · 98 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,721/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$551
• HOA: −$0
• Vac / Maint / Mgmt: −$361
• Net cashflow: $-57/mo
• Annual: $-690/yr
• Cap rate: 8.98%
• Cash-on-cash: 9.59%
• DSCR: 1.43
• 1% rule: 1.04%
• Cash to close: $46,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $-57 ($-690/yr) — negative.
• To cash-flow at today's rent, offer at most $155k (6.2% below list).
• Meets the 1% rule at list price ($2k rent vs $165k).
• It's been on market 98 days — a 9% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $150k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#203 in WA) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, amenities A-; Watch: employment D+, crime F, commute F.
• Shelton School District (town): math 31% / reading 43% proficiency, ranked #237 of 291 in WA (top 81%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Evergreen Elementary School (429 students, 86% FRL); Shelton High School (1,473 students, 62% FRL) — zoned schools average 74% FRL vs 59% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $427/mo; built in 1893 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 439 active listings in the ZIP; solid renter incomes; 299 units permitted in Mason County in 2024 (0 in 5+ unit buildings).
• Mason County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 15y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $35k; list at $165k implies a 371% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.0% vs local median 3.1% in Shelton — 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.

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?
• It's been on market 98 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1893 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 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?