2355 Sparrow Loop #169

Kelso, WA 98626

$85,000B-

3 bd · 2.0 ba · 1,674 sqft · Built 1990 · Manufactured · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,877/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$142
• HOA: −$0
• Vac / Maint / Mgmt: −$394
• Net cashflow: $895/mo
• Annual: $10,742/yr
• Cap rate: 18.93%
• Cash-on-cash: 45.14%
• DSCR: 3.01
• 1% rule: 2.21%
• Cash to close: $23,800

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $85k. Condition is rated good.
• At list price, monthly cash flow is $895 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $85k).
• It's been on market 17 days — a 2% lower offer ($84k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $84k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k 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-, amenities F, commute 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.
• Zoned schools: Butler Acres Elementary (406 students, 60% FRL); Coweeman Middle School (570 students, 64% FRL); Kelso High School (1,424 students, 61% FRL).
• Market conditions: Rents rising fast (+4.1%/yr); 219 active listings in the ZIP; 2 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.
• 6 sale attempts since 2y 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 $60k; 42% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 4.1% rent growth), your $24k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 18.9% 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.

Questions for listing agent

• 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.
• 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.