5403 Lemon Rd NE

Olympia, WA 98506

$595,000D-

3 bd · 2.0 ba · 2,314 sqft · Built 2006 · SingleFamily · Pending · 90 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,333/mo
• Mortgage (P&I): −$3,120
• Tax + insurance: −$350
• HOA: −$0
• Vac / Maint / Mgmt: −$700
• Net cashflow: $-837/mo
• Annual: $-10,046/yr
• Cap rate: 4.60%
• Cash-on-cash: -6.03%
• DSCR: 0.73
• 1% rule: 0.56%
• Cash to close: $166,600

Investor read

• This is a 3-bed/2.0-bath single-family listed at $595k.
• At list price, monthly cash flow is $-837 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $447k (24.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $333k (44.0% below list).
• It's been on market 90 days — a 6% lower offer ($559k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $333k (44.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#58 in WA, #1,036 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: crime F, cost of living D-.
• North Thurston Public Schools (suburban): math 51% / reading 62% proficiency, ranked #80 of 291 in WA (top 28%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+3.7%/yr); 149 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 6 sale attempts since 18y ago; this cycle's ask has dropped $34k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $295k; list at $595k implies a 102% gain — meaningful room to come down on a strong offer.
• Cap rate 4.6% vs local median 2.4% in Olympia — 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 44% of the median local income ($92k/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?
• It's been on market 90 days. Have you received any prior offers? Is the seller open to a 44% concession, seller financing, or rate buy-down credit?
• 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?
• 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.