218 Virginia Dr

Lacy-Lakeview, TX 76705

$120,000B

3 bd · 1.5 ba · 1,098 sqft · Built 1962 · SingleFamily · Pending · 132 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,313/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$344
• HOA: −$0
• Vac / Maint / Mgmt: −$486
• Net cashflow: $854/mo
• Annual: $10,243/yr
• Cap rate: 14.83%
• Cash-on-cash: 30.49%
• DSCR: 2.36
• 1% rule: 1.93%
• Cash to close: $33,600

Investor read

• This is a 3-bed/1.5-bath single-family listed at $120k.
• At list price, monthly cash flow is $854 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $120k).
• It's been on market 132 days — a 12% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Connally ISD (suburban): math 16% / reading 25% proficiency, ranked #781 of 826 in TX (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 2.9% of price.
• Market conditions: Rents rising (+2.2%/yr); 297 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); 1,014 units permitted in McLennan County in 2024 (200 in 5+ unit buildings).
• McLennan County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 13y ago; this cycle's ask has dropped $45k (27%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 2.2% rent growth), your $34k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 50% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.8% vs local median 5.1% in Lacy-Lakeview — 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 $2,313/mo this rent would consume 48% of the median local household income ($58k/yr) (locally 668% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 132 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1962 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.
• 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.