505 E Hawthorne Rd

Country Homes, WA 99218

$4,800,000F

594 bd · 540.0 ba · 12,050 sqft · Built 2025 · MultiFamily · Active · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $23,625/mo
• Mortgage (P&I): −$25,172
• Tax + insurance: −$4,587
• HOA: −$0
• Vac / Maint / Mgmt: −$4,961
• Net cashflow: $-11,095/mo
• Annual: $-133,146/yr
• Cap rate: 3.52%
• Cash-on-cash: -9.91%
• DSCR: 0.56
• 1% rule: 0.49%
• Cash to close: $1,344,000

Investor read

• This is a 6×1bd/1.0ba + 9×2bd/2.0ba + 3×3bd/2.0ba units multifamily listed at $4.80M.
• At list price, monthly cash flow is $-11k ($-133k/yr) — negative. Per door: $-616/mo.
• To cash-flow at today's rent, offer at most $2.84M (40.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $2.36M (50.8% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $2.36M (50.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $33k of loan paydown is wiped out by about $144k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#57 in WA, #1,014 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: crime C-, employment C-.
• Mead School District (suburban): math 63% / reading 72% proficiency, ranked #23 of 291 in WA (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Evergreen Elementary School (485 students, 49% FRL); Mead Open Doors (17 students, 0% FRL) — zoned schools at 24% FRL track the district average.
• Market conditions: 100 active listings in the ZIP; solid renter incomes; 3,608 units permitted in Spokane County in 2024 (1,792 in 5+ unit buildings).
• Spokane County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 6 sale attempts since 8y 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 $195k; list at $4.80M implies a 2362% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.5% vs local median 2.5% in Country Homes — 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 $23,625/mo this rent would consume 351% of the median local household income ($81k/yr) (locally 652% 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?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.