425 W Lamberth Rd

Sherman, TX 75092

$172,500D

3 bd · 2.0 ba · 1,286 sqft · Built 1964 · SingleFamily · Active · 173 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,553/mo
• Mortgage (P&I): −$905
• Tax + insurance: −$416
• HOA: −$0
• Vac / Maint / Mgmt: −$326
• Net cashflow: $-94/mo
• Annual: $-1,124/yr
• Cap rate: 5.64%
• Cash-on-cash: -2.33%
• DSCR: 0.90
• 1% rule: 0.90%
• Cash to close: $48,300

Investor read

• This is a 3-bed/2.0-bath single-family listed at $172k.
• At list price, monthly cash flow is $-94 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $156k (9.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $155k (10.0% below list).
• It's been on market 173 days — a 12% lower offer ($152k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $152k (12.0% below list) — sets the bar for market timing.
• 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 (#1,027 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, employment C-, amenities F.
• Sherman ISD (urban): math 31% / reading 37% proficiency, ranked #546 of 826 in TX (top 66%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Fairview El (math 32% / reading 37%, grade F, #1,995 of 4,322 statewide, top 50%, 294 students, 75% FRL); Piner Middle (math 31% / reading 41%, grade F, #805 of 1,662 statewide, top 50%, 818 students, 75% FRL); Sherman H S (math 28% / reading 44%, grade F, #930 of 1,632 statewide, top 57%, 2,155 students, 70% FRL).
• Market conditions: Rents soft (-2.4%/yr); 640 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,272 units permitted in Grayson County in 2024 (750 in 5+ unit buildings).
• Grayson County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 3y ago; this cycle's ask has dropped $62k (27%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 3.7% in Sherman — 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

• 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 173 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1964 — 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 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.