301 SW 5th Ave

Kelso, WA 98626

$325,000C

2 bd · 2.0 ba · 1,606 sqft · Built 1900 · MultiFamily · Pending · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,395/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$381
• HOA: −$0
• Vac / Maint / Mgmt: −$713
• Net cashflow: $597/mo
• Annual: $7,162/yr
• Cap rate: 8.50%
• Cash-on-cash: 7.87%
• DSCR: 1.35
• 1% rule: 1.04%
• Cash to close: $91,000

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $325k.
• At list price, monthly cash flow is $597 ($7k/yr) — positive. Per door: $298/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $325k).
• It's been on market 46 days — a 3% lower offer ($315k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $315k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#324 in WA) — a middle-class / working-renter tenant base. Strengths: housing A+, cost of living A-; Watch: health & safety C-, schools D-, amenities F.
• Kelso School District (suburban): math 35% / reading 53% proficiency, ranked #191 of 291 in WA (top 66%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.1%/yr); 220 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 348 units permitted in Cowlitz County in 2024 (40 in 5+ unit buildings).
• Cowlitz County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 8.5% vs local median 3.4% in Kelso — 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 $3,395/mo this rent would consume 54% of the median local household income ($76k/yr) (locally 722% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 46 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 1900 — 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?
• 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.