2135 40th St SE

Paris, TX 75460

$155,000D

3 bd · 1.0 ba · 1,264 sqft · Built 1996 · SingleFamily · Active · 149 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,323/mo
• Mortgage (P&I): −$813
• Tax + insurance: −$219
• HOA: −$0
• Vac / Maint / Mgmt: −$278
• Net cashflow: $13/mo
• Annual: $158/yr
• Cap rate: 6.39%
• Cash-on-cash: 0.36%
• DSCR: 1.02
• 1% rule: 0.85%
• Cash to close: $43,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $155k.
• At list price, monthly cash flow is $13 ($158/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $132k (14.6% below list).
• It's been on market 149 days — a 12% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $132k (14.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#984 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime F, amenities F, commute F.
• Paris ISD (town): math 36% / reading 37% proficiency, ranked #521 of 826 in TX (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Aikin El (math 32% / reading 35%, grade F, #2,174 of 4,322 statewide, top 51%, 937 students, 74% FRL); Crockett Int (math 33% / reading 33%, grade F, #930 of 1,662 statewide, top 57%, 560 students, 79% FRL); Paris H S (math 60% / reading 51%, grade C, #364 of 1,632 statewide, top 23%, 934 students, 71% FRL) — zoned schools at 75% FRL track the district average.
• Market conditions: 275 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 119 units permitted in Lamar County in 2024 (71 in 5+ unit buildings).
• Lamar County population projected at -13% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.7% in Paris — 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.
• This rent runs 34% of the median local income ($46k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 149 days. Have you received any prior offers? Is the seller open to a 15% 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?
• Crime grade is F 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?
• 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.