306 2nd St NE

Auburn, WA 98002

$995,000F

5 bd · 3.0 ba · 3,120 sqft · Built 1922 · MultiFamily · Active · 371 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,880/mo
• Mortgage (P&I): −$5,218
• Tax + insurance: −$1,119
• HOA: −$0
• Vac / Maint / Mgmt: −$1,655
• Net cashflow: $-112/mo
• Annual: $-1,346/yr
• Cap rate: 6.16%
• Cash-on-cash: -0.48%
• DSCR: 0.98
• 1% rule: 0.79%
• Cash to close: $278,600

Investor read

• This is a 5 × 1-bed/?-bath units multifamily listed at $995k.
• At list price, monthly cash flow is $-112 ($-1k/yr) — negative. Per door: $-22/mo.
• To cash-flow at today's rent, offer at most $975k (2.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $788k (20.8% below list).
• It's been on market 371 days — a 12% lower offer ($876k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $788k (20.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $30k of value loss. Plan a longer hold.
• 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.
• Zoned schools: Washington Elementary School (491 students, 74% FRL); Auburn Senior High School (1,844 students, 67% FRL) — zoned schools average 70% FRL vs 44% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1922 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.5%/yr); 171 active listings in the ZIP; 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.
• 5 sale attempts since 25y ago; this cycle's ask has dropped $95k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $176k; list at $995k implies a 464% gain — meaningful room to come down on a strong offer.
• Cap rate 6.2% 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.
• At $7,880/mo this rent would consume 120% of the median local household income ($79k/yr) (locally 2202% 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?
• It's been on market 371 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• 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?
• Built in 1922 — 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?