4040 Auburn Way Way S #101

Auburn, WA 98092

$59,000A-

2 bd · 1.0 ba · 1,120 sqft · Built 1976 · Manufactured · Active · 168 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,084/mo
• Mortgage (P&I): −$309
• Tax + insurance: −$98
• HOA: −$0
• Vac / Maint / Mgmt: −$438
• Net cashflow: $1,238/mo
• Annual: $14,860/yr
• Cap rate: 31.48%
• Cash-on-cash: 89.95%
• DSCR: 5.00
• 1% rule: 3.53%
• Cash to close: $16,520

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $59k.
• At list price, monthly cash flow is $1k ($15k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $59k).
• It's been on market 168 days — a 12% lower offer ($52k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $52k (12.0% below list) — sets the bar for market timing.
• In year one you build about $6k of equity ($408 loan paydown + $6k appreciation (10.0% local appreciation)).
• Location reads 81/100 on livability (#75 in WA, #1,371 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• Auburn School District (urban): math 47% / reading 56% proficiency, ranked #125 of 291 in WA (top 43%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents soft (-0.5%/yr); 296 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; 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.
• 2 sale attempts; this cycle's ask has dropped $16k (21%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 0.0% rent growth), your $17k cash investment doubles in ~1 year — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 31.5% vs local median 2.7% in Auburn — 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

• It's been on market 168 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1976 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.