Plan 2565 Modeled Plan

South Hill, WA 98375

$604,950F

4 bd · 2.5 ba · 2,565 sqft · Built — · SingleFamily · Active · 394 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,642/mo
• Mortgage (P&I): −$3,584
• Tax + insurance: −$1,139
• HOA: −$0
• Vac / Maint / Mgmt: −$975
• Net cashflow: $-1,056/mo
• Annual: $-12,670/yr
• Cap rate: 4.44%
• Cash-on-cash: -6.62%
• DSCR: 0.71
• 1% rule: 0.68%
• Cash to close: $191,367

Investor read

• This is a 4-bed/2.5-bath single-family listed at $605k.
• At list price, monthly cash flow is $-1k ($-13k/yr) — negative.
• To cash-flow at today's rent, offer at most $531k (12.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $464k (23.3% below list).
• It's been on market 394 days — a 12% lower offer ($532k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $464k (23.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#84 in WA, #1,620 nationally) — a professional / high-income tenant draw. Strengths: employment A+, housing A+, health & safety A+; Watch: crime C-, cost of living F.
• Puyallup School District (suburban): math 53% / reading 66% proficiency, ranked #52 of 291 in WA (top 18%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Ridgecrest Elementary (479 students, 43% FRL); Ferrucci Jr High (819 students, 52% FRL); Emerald Ridge High School (1,537 students, 37% FRL) — zoned schools average 44% FRL vs 27% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.8%/yr); 285 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 3,209 units permitted in Pierce County in 2024 (1,269 in 5+ unit buildings).
• Pierce County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 4.4% vs local median 3.0% in South Hill — 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 $4,642/mo this rent would consume 48% of the median local household income ($117k/yr) (locally 541% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 394 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• 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?
• 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.