2101 S 324th St #228

Federal Way, WA 98003

$199,000C-

2 bd · 2.0 ba · 1,392 sqft · Built 2022 · Manufactured · Active · 330 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,735/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$332
• HOA: −$0
• Vac / Maint / Mgmt: −$364
• Net cashflow: $-5/mo
• Annual: $-56/yr
• Cap rate: 6.26%
• Cash-on-cash: -0.10%
• DSCR: 1.00
• 1% rule: 0.87%
• Cash to close: $55,720

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $199k. Condition is rated good.
• At list price, monthly cash flow is $-5 ($-56/yr) — negative.
• To cash-flow at today's rent, offer at most $198k (0.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $173k (12.8% below list).
• It's been on market 330 days — a 12% lower offer ($175k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $173k (12.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k 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); 403 active listings in the ZIP; 26 comparable units currently listed for rent nearby; rentals lingering (median 74d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• Cap rate 6.3% vs local median 2.8% 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.

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 330 days. Have you received any prior offers? Is the seller open to a 13% 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.
• 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.