3055 80th Ave SE #107

Mercer Island, WA 98040

$459,000D

2 bd · 1.0 ba · 866 sqft · Built 1979 · Condo · Active · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,700/mo
• Mortgage (P&I): −$2,407
• Tax + insurance: −$765
• HOA: −$567
• Vac / Maint / Mgmt: −$567
• Net cashflow: $-1,606/mo
• Annual: $-19,275/yr
• Cap rate: 2.09%
• Cash-on-cash: -15.00%
• DSCR: 0.33
• 1% rule: 0.59%
• Cash to close: $128,520

Investor read

• This is a 2-bed/1.0-bath condo listed at $459k.
• At list price, monthly cash flow is $-2k ($-19k/yr) — negative.
• To cash-flow at today's rent, offer at most $227k (50.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $270k (41.2% below list).
• It's been on market 80 days — a 6% lower offer ($431k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $227k (50.6% below list) — sets the bar for cash-flow.
• In year one you build about $2k of equity ($3k loan paydown + $-1k appreciation (-0.2% local appreciation)).
• Location reads 76/100 on livability (#154 in WA, #3,481 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, commute A+; Watch: amenities F, cost of living F, health & safety F.
• Mercer Island School District (suburban): math 83% / reading 87% proficiency, ranked #1 of 291 in WA (top 0%) — strong family-tenant draw, lease renewals of 3-5y typical; only 3% free/reduced lunch — higher-income household profile.
• Watch-outs: HOA is 21% of rent.
• Market conditions: Rents flat; 132 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 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.
• By year 9, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 2.1% vs local median 1.0% in Mercer Island — 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 is only 15% of the median local income ($219k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 80 days. Have you received any prior offers? Is the seller open to a 51% concession, seller financing, or rate buy-down credit?
• Built in 1979 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 A-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?