903 N Neel St

Kennewick, WA 99336

$419,900D

4 bd · 3.0 ba · 2,564 sqft · Built 1961 · MultiFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,401/mo
• Mortgage (P&I): −$2,202
• Tax + insurance: −$443
• HOA: −$0
• Vac / Maint / Mgmt: −$714
• Net cashflow: $42/mo
• Annual: $499/yr
• Cap rate: 6.41%
• Cash-on-cash: 0.42%
• DSCR: 1.02
• 1% rule: 0.81%
• Cash to close: $117,572

Investor read

• This is a 2 × 3-bed/1.75-bath units multifamily listed at $420k.
• At list price, monthly cash flow is $42 ($499/yr) — positive. Per door: $21/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $340k (19.0% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $340k (19.0% 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 $13k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#131 in WA, #2,599 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A; Watch: amenities D+, crime F.
• Kennewick School District (urban): math 43% / reading 58% proficiency, ranked #141 of 291 in WA (top 48%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Hawthorne Elementary School (474 students, 80% FRL); Highlands Middle School (750 students, 84% FRL); Kamiakin High School (1,884 students, 43% FRL) — zoned schools average 69% FRL vs 48% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.4%/yr); 292 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,532 units permitted in Benton County in 2024 (389 in 5+ unit buildings).
• Benton County population projected at +32% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.4% vs local median 3.3% in Kennewick — 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 $3,401/mo this rent would consume 65% of the median local household income ($63k/yr) (locally 2605% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1961 — 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 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?
• 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.