508 Emerson Ave

Hoquiam, WA 98550

$385,000B-

6 bd · 3.0 ba · 2,976 sqft · Built 1896 · MultiFamily · Active · 115 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,093/mo
• Mortgage (P&I): −$2,019
• Tax + insurance: −$804
• HOA: −$0
• Vac / Maint / Mgmt: −$1,070
• Net cashflow: $1,201/mo
• Annual: $14,409/yr
• Cap rate: 11.37%
• Cash-on-cash: 18.11%
• DSCR: 1.81
• 1% rule: 1.32%
• Cash to close: $107,800

Investor read

• This is a 3 × 2-bed/?-bath units multifamily listed at $385k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $400/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $385k).
• It's been on market 115 days — a 9% lower offer ($350k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $350k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#171 in WA, #4,268 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: health & safety C-, employment D, schools D-.
• Hoquiam School District (town): math 30% / reading 41% proficiency, ranked #250 of 291 in WA (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo; built in 1896 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 154 active listings in the ZIP; 297 units permitted in Grays Harbor County in 2024 (17 in 5+ unit buildings).
• Grays Harbor County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 9y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $120k; list at $385k implies a 221% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $108k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.4% vs local median 3.8% in Hoquiam — 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 $5,093/mo this rent would consume 111% of the median local household income ($55k/yr) (locally 438% 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 115 days. Have you received any prior offers? Is the seller open to a 9% 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 1896 — 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?
• 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 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?