1736 Island Dr NW

Olympia, WA 98502

$434,000D-

3 bd · 2.0 ba · 1,224 sqft · Built 1992 · SingleFamily · Pending · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,541/mo
• Mortgage (P&I): −$2,276
• Tax + insurance: −$424
• HOA: −$127
• Vac / Maint / Mgmt: −$534
• Net cashflow: $-820/mo
• Annual: $-9,839/yr
• Cap rate: 4.03%
• Cash-on-cash: -8.10%
• DSCR: 0.64
• 1% rule: 0.59%
• Cash to close: $121,520

Investor read

• This is a 3-bed/2.0-bath single-family listed at $434k.
• At list price, monthly cash flow is $-820 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $289k (33.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $254k (41.4% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $254k (41.4% below list) — sets the bar for 1% rule.
• In year one you build about $46k of equity ($3k loan paydown + $43k appreciation (10.0% local appreciation)).
• Location reads 83/100 on livability (#58 in WA, #1,036 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: crime F, cost of living D-.
• Griffin School District (suburban): math 59% / reading 68% proficiency, ranked #28 of 291 in WA (top 10%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Zoned schools: Griffin School (577 students, 23% FRL).
• Market conditions: Rents rising (+3.2%/yr); 304 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 1,222 units permitted in Thurston County in 2024 (508 in 5+ unit buildings).
• Thurston County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 22y 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 $147k; list at $434k implies a 196% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$75k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.0% vs local median 2.4% in Olympia — 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.
• This rent runs 33% of the median local income ($92k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• 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.