603 N Rachel St

Falls City, TX 78113

$299,000D

4 bd · 2.5 ba · 2,453 sqft · Built 1977 · SingleFamily · Pending · 99 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,547/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$292
• HOA: −$0
• Vac / Maint / Mgmt: −$325
• Net cashflow: $-638/mo
• Annual: $-7,656/yr
• Cap rate: 3.73%
• Cash-on-cash: -9.15%
• DSCR: 0.59
• 1% rule: 0.52%
• Cash to close: $83,720

Investor read

• This is a 4-bed/2.5-bath single-family listed at $299k.
• At list price, monthly cash flow is $-638 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $186k (37.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $155k (48.3% below list).
• It's been on market 99 days — a 9% lower offer ($272k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $155k (48.3% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($2k loan paydown + $9k appreciation (3.0% local appreciation)).
• Location reads 79/100 on livability (#64 in TX, #2,356 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Falls City ISD (rural): math 82% / reading 74% proficiency, ranked #6 of 826 in TX (top 1%) — strong family-tenant draw, lease renewals of 3-5y typical; only 19% free/reduced lunch — higher-income household profile.
• Zoned schools: Falls City El (math 82% / reading 67%, grade A, #82 of 4,322 statewide, top 2%, 258 students, 19% FRL); Falls City H S (math 77% / reading 82%, grade A-, #40 of 1,632 statewide, top 3%, 184 students, 20% FRL) — zoned schools at 19% FRL track the district average.
• Market conditions: 12 active listings in the ZIP; 78 units permitted in Karnes County in 2024 (0 in 5+ unit buildings).
• Karnes County population projected at +42% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $40k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 4, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→20/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 99 days. Have you received any prior offers? Is the seller open to a 48% concession, seller financing, or rate buy-down credit?
• Built in 1977 — 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.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.