877 5th Pl NE

Issaquah, WA 98029

$655,000D-

4 bd · 2.0 ba · 1,370 sqft · Built 2008 · Townhouse · Pending · 78 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,105/mo
• Mortgage (P&I): −$3,435
• Tax + insurance: −$725
• HOA: −$407
• Vac / Maint / Mgmt: −$862
• Net cashflow: $-1,324/mo
• Annual: $-15,882/yr
• Cap rate: 3.87%
• Cash-on-cash: -8.66%
• DSCR: 0.61
• 1% rule: 0.63%
• Cash to close: $183,400

Investor read

• This is a 4-bed/2.0-bath townhouse listed at $655k.
• At list price, monthly cash flow is $-1k ($-16k/yr) — negative.
• To cash-flow at today's rent, offer at most $421k (35.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $411k (37.3% below list).
• It's been on market 78 days — a 6% lower offer ($616k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $411k (37.3% 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 $20k of value loss. Plan a longer hold.
• Location reads 89/100 on livability (#6 in WA, #104 nationally) — a professional / high-income tenant draw. Strengths: schools A+, amenities A+, commute A+; Watch: cost of living F.
• Issaquah School District (suburban): math 77% / reading 81% proficiency, ranked #4 of 291 in WA (top 1%) — strong family-tenant draw, lease renewals of 3-5y typical; only 7% free/reduced lunch — higher-income household profile.
• Market conditions: Rents soft (-0.9%/yr); 211 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals leasing fast (median 3d 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 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 $265k; list at $655k implies a 148% gain — meaningful room to come down on a strong offer.
• Cap rate 3.9% vs local median 1.4% in Issaquah — 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 78 days. Have you received any prior offers? Is the seller open to a 37% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.