1507 W 5th St

Freeport, TX 77541

$65,000B-

2 bd · 1.0 ba · 1,253 sqft · Built 1950 · SingleFamily · Pending · 135 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,197/mo
• Mortgage (P&I): −$341
• Tax + insurance: −$311
• HOA: −$0
• Vac / Maint / Mgmt: −$251
• Net cashflow: $294/mo
• Annual: $3,523/yr
• Cap rate: 12.94%
• Cash-on-cash: 23.74%
• DSCR: 2.06
• 1% rule: 1.84%
• Cash to close: $18,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $65k.
• At list price, monthly cash flow is $294 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $65k).
• It's been on market 135 days — a 12% lower offer ($57k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $57k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $449 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 58/100 on livability (#1,205 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: crime D, amenities F, commute F.
• Brazosport ISD (suburban): math 43% / reading 41% proficiency, ranked #305 of 826 in TX (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Freeport El (579 students, 89% FRL); O'Hara Lanier Middle (math 41% / reading 29%, grade F, #842 of 1,662 statewide, top 51%, 340 students, 92% FRL); Brazosport H S (math 40% / reading 27%, grade F, #1,011 of 1,632 statewide, top 63%, 948 students, 78% FRL) — zoned schools average 86% FRL vs 53% district-wide (33 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 4.0% of price; flood insurance adds $66/mo; built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 595 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 3,960 units permitted in Brazoria County in 2024 (593 in 5+ unit buildings).
• Brazoria County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 4y ago; this cycle's ask has dropped $60k (48%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $18k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk; severe wind risk, 99% 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 12.9% vs local median 3.8% in Freeport — 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.

Questions for listing agent

• It's been on market 135 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1950 — 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D 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?