3661 Shorewood Ave

Freeland, WA 98253

$555,000C-

3 bd · 2.0 ba · 1,556 sqft · Built 1962 · SingleFamily · Active · 96 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,023/mo
• Mortgage (P&I): −$2,910
• Tax + insurance: −$666
• HOA: −$29
• Vac / Maint / Mgmt: −$845
• Net cashflow: $-428/mo
• Annual: $-5,131/yr
• Cap rate: 5.51%
• Cash-on-cash: -2.79%
• DSCR: 0.88
• 1% rule: 0.72%
• Cash to close: $155,400

Investor read

• This is a 3-bed/2.0-bath single-family listed at $555k.
• At list price, monthly cash flow is $-428 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $479k (13.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $402k (27.5% below list).
• It's been on market 96 days — a 9% lower offer ($505k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $402k (27.5% below list) — sets the bar for 1% rule.
• In year one you build about $24k of equity ($4k loan paydown + $20k appreciation (3.6% local appreciation)).
• Location reads 64/100 on livability (#367 in WA) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A; Watch: health & safety C-, amenities F, commute F.
• Coupeville School District (rural): math 54% / reading 73% proficiency, ranked #40 of 291 in WA (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Coupeville Elementary School (491 students, 47% FRL); Coupeville Middle School (216 students, 38% FRL); Coupeville High School (289 students, 36% FRL).
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 37 active listings in the ZIP; 402 units permitted in Island County in 2024 (54 in 5+ unit buildings).
• Island County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 16y ago; this cycle's ask has dropped $44k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $389k; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.5% vs local median 1.9% in Freeland — 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 96 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• Built in 1962 — 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?