2101 S 324th St #165

Federal Way, WA 98003

$125,000B

2 bd · 2.0 ba · 1,320 sqft · Built 1968 · Manufactured · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,244/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$208
• HOA: −$0
• Vac / Maint / Mgmt: −$471
• Net cashflow: $909/mo
• Annual: $10,904/yr
• Cap rate: 15.02%
• Cash-on-cash: 31.16%
• DSCR: 2.39
• 1% rule: 1.79%
• Cash to close: $35,000

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $125k.
• At list price, monthly cash flow is $909 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $125k).
• It's been on market 23 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#221 in WA) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A+; Watch: crime F, cost of living F.
• Federal Way School District (suburban): math 35% / reading 47% proficiency, ranked #207 of 291 in WA (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Lake Dolloff Elementary School (469 students, 85% FRL); Sequoyah Middle School (535 students, 81% FRL); Todd Beamer High School (1,302 students, 70% FRL) — zoned schools average 79% FRL vs 48% district-wide (31 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.3%/yr); 233 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals leasing fast (median 7d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 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.
• 4 sale attempts since 18y 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 $36k; list at $125k implies a 242% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 2.3% rent growth), your $35k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 15.0% vs local median 2.7% in Federal Way — 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 36% of the median local income ($75k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1968 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.