The Cardinal II Plan

Willis, TX 77318

$218,990F

3 bd · 2.0 ba · 1,566 sqft · Built — · SingleFamily · Active · 199 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,630/mo
• Mortgage (P&I): −$1,325
• Tax + insurance: −$421
• HOA: −$0
• Vac / Maint / Mgmt: −$342
• Net cashflow: $-459/mo
• Annual: $-5,503/yr
• Cap rate: 4.12%
• Cash-on-cash: -7.78%
• DSCR: 0.65
• 1% rule: 0.65%
• Cash to close: $70,767

Investor read

• This is a 3-bed/2.0-bath single-family listed at $219k. Condition is rated good.
• At list price, monthly cash flow is $-459 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $186k (14.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $163k (25.5% below list).
• It's been on market 199 days — a 12% lower offer ($193k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $163k (25.5% 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 62/100 on livability (#933 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, employment D+, amenities F.
• Willis ISD (rural): math 33% / reading 40% proficiency, ranked #458 of 826 in TX (top 55%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: C C Hardy El (math 32% / reading 29%, grade F, #2,464 of 4,322 statewide, top 58%, 752 students, 83% FRL); Lynn Lucas Middle (math 23% / reading 32%, grade F, #1,156 of 1,662 statewide, top 71%, 971 students, 74% FRL); Willis H S (math 19% / reading 46%, grade F, #1,029 of 1,632 statewide, top 64%, 2,521 students, 57% FRL) — zoned schools average 71% FRL vs 56% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents soft (-2.1%/yr); 1569 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals lingering (median 83d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 13,259 units permitted in Montgomery County in 2024 (1,402 in 5+ unit buildings).
• Montgomery County population projected at +65% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 199 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.