4040 Auburn Way S #16

Auburn, WA 98092

$94,000A-

2 bd · 1.5 ba · 1,056 sqft · Built 1975 · Manufactured · Active · 130 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,086/mo
• Mortgage (P&I): −$493
• Tax + insurance: −$157
• HOA: −$0
• Vac / Maint / Mgmt: −$438
• Net cashflow: $998/mo
• Annual: $11,981/yr
• Cap rate: 19.04%
• Cash-on-cash: 45.52%
• DSCR: 3.03
• 1% rule: 2.22%
• Cash to close: $26,320

Investor read

• This is a 2-bed/1.5-bath manufactured listed at $94k.
• At list price, monthly cash flow is $998 ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $94k).
• It's been on market 130 days — a 12% lower offer ($83k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $83k (12.0% below list) — sets the bar for market timing.
• In year one you build about $10k of equity ($650 loan paydown + $9k appreciation (10.0% local appreciation)).
• Location reads 81/100 on livability (#75 in WA, #1,371 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• Auburn School District (urban): math 47% / reading 56% proficiency, ranked #125 of 291 in WA (top 43%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Chinook Elementary School (562 students, 70% FRL); Olympic Middle School (900 students, 78% FRL); Auburn Senior High School (1,844 students, 67% FRL) — zoned schools average 72% FRL vs 44% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents soft (-0.5%/yr); 298 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 10,555 units permitted in King County in 2024 (7,119 in 5+ unit buildings).
• King County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $16k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 0.0% rent growth), your $26k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 19.0% vs local median 2.7% in Auburn — 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

• It's been on market 130 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1975 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.