Question 1

Does the Washington rent cap apply the same way across a whole portfolio?

Accepted Answer

The percentage does. The exemptions do not. RCW 59.18.700 caps increases on every covered tenancy at 7% plus CPI or 10%, whichever is less, with no increase in the first 12 months of a tenancy, and the Department of Commerce publishes a single statewide number: 9.683% for 2026, 10% for 2027. The index is Seattle-area CPI, so a Tri-Cities door and a Spokane door are governed by the same figure. What varies door by door is the exemption: RCW 59.18.710(1)(a) exempts a unit whose first certificate of occupancy issued 12 or fewer years before the date of the notice, which means the newer buildings in your portfolio may be exempt while the older ones are not, and each one rolls out on its own twelfth anniversary. Portfolio size itself changes nothing: the statute draws no unit-count line. Track CO dates per parcel.

Question 2

Does holding the portfolio in an LLC change anything under Washington law?

Accepted Answer

In two places, yes, and they point in opposite directions. On the rent cap, RCW 59.18.710(2) switches off the owner-occupancy exemptions in subsections (e) through (g) where the owner is a REIT, a corporation, or an LLC with at least one corporate member. Those exemptions require owner occupancy anyway, so most portfolio holders never had them. On foreclosure, entity vesting works for you: RCW 61.24.165(2) excludes from Foreclosure Fairness Act mediation both commercial loans and property vested in a partnership, corporation, or limited liability company at the time of the notice of default. Note that no court or Attorney General reading of the entity list in 59.18.710(2) has been located, including whether an LLC with only natural-person members sits outside it, so do not build a plan on that gap. Your Washington attorney should size up the structure.

Question 3

How do property tax appeals work when the portfolio spans several counties?

Accepted Answer

Parcel by parcel, county by county, on deadlines that are not identical. RCW 84.40.030(1) requires every property to be valued at 100% of true and fair value, with no assessment-increase cap. To contest one, RCW 84.40.038(1) gives you until July 1 of the assessment year, or 30 days after the value-change notice was sent, or a county-set window of up to 60 days, whichever is later. The county-set windows are exactly that, county-set, and we have not verified them for the metro counties, so calendar each one separately rather than assuming July 1 covers you everywhere. Remember too that the familiar 1% figure is a levy limit on districts, not a cap on any bill, under RCW 84.55.010 and RCW 84.55.005(2). On a blanket loan the tax line is aggregated, so one bad assessment moves the whole payment.

Question 4

What happens to excise tax when I release a property out of the blanket?

Accepted Answer

A sale is a transfer, and Washington REET is graduated per transfer. The state rates are 1.10% up to $525,000, 1.28% to $1,525,000, 2.75% to $3,025,000, and 3.00% above, plus a $5 state technology fee per transfer, with a possible 0.25% local levy and another 0.25% in Growth Management Act jurisdictions. Selling doors one at a time means each sale is priced on its own selling price and mostly stays in the low bands, whereas a single bulk transfer can push the top slice into the higher ones. On a $450,000 release in a full 0.50% city: $4,950 of state REET (450,000 x 1.10% = 4,950) plus $2,250 local, about $7,200. Individual property release is built into how these loans are structured, but the tax treatment of any specific transfer is a question for your attorney and your CPA.

Question 5

Do notice rules differ across a Washington portfolio?

Accepted Answer

Yes, and this is where a statewide portfolio gets operationally messy. RCW 59.18.140 sets a floor of 90 days written notice of a rent increase statewide, on the statutory form in RCW 59.18.720 stating the effective date, the percentage, the dollar increase and the new total. Seattle requires 180 days under SMC 22.206.180 and attaches an Economic Displacement Relocation Assistance obligation to increases of 10% or more in a 12-month period. Tacoma also requires at least 180 days plus relocation assistance. We could not locate comparable ordinances in Spokane or Vancouver WA, so verify each city rather than assuming the state floor is the whole answer. A single portfolio increase letter mailed on one date will not satisfy all of them. Enforcement is real: the Attorney General can seek civil penalties of up to $7,500 per violation.

Question 6

How many Washington properties do I need, and what is the minimum loan size?

Accepted Answer

Five or more properties, starting at $500,000 total. Below that a set of individual loans usually works out better. You get one loan and a single payment across the portfolio, with individual property release so you can sell a door without unwinding the whole facility. If you are holding fewer than five, look at DSCR on each property instead. Subject to underwriting.

Question 7

What credit do you look at on a Washington portfolio loan?

Accepted Answer

We look at the portfolio first. The loan is sized on the properties and their combined cash flow, so credit informs the terms rather than deciding them, and there is no hard credit pull to open a file. Weaker credit generally shows up as lower leverage rather than a decline. If your doors are all newer buildings, tell us the certificate of occupancy dates, because the 12-year rent cap exemption is genuinely material to the income picture. Subject to underwriting.

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