422 Madison St

Centralia, WA 98531

$260,000C-

4 bd · 1.0 ba · 1,424 sqft · Built 1925 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,190/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$337
• HOA: −$0
• Vac / Maint / Mgmt: −$460
• Net cashflow: $30/mo
• Annual: $355/yr
• Cap rate: 6.43%
• Cash-on-cash: 0.49%
• DSCR: 1.02
• 1% rule: 0.84%
• Cash to close: $72,800

Investor read

• This is a 4-bed/1.0-bath single-family listed at $260k.
• At list price, monthly cash flow is $30 ($355/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $219k (15.8% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $219k (15.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#81 in WA, #1,497 nationally) — a professional / high-income tenant draw. Strengths: commute A+, health & safety A+, cost of living A; Watch: crime C-, employment F.
• Centralia School District (town): math 39% / reading 52% proficiency, ranked #187 of 291 in WA (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 65% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Jefferson Lincoln Elementary (418 students, 85% FRL); Centralia Middle School (549 students, 80% FRL); Centralia High School (986 students, 70% FRL).
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.0%/yr); 263 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 265 units permitted in Lewis County in 2024 (44 in 5+ unit buildings).
• Lewis County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $130k; list at $260k implies a 100% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.0% in Centralia — 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 41% of the median local income ($63k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1925 — 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.
• 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.