1700 Palo Duro Way

Celina, TX 75009

$400,000D

4 bd · 3.0 ba · 2,427 sqft · Built 2024 · SingleFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,548/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$1,098
• HOA: −$135
• Vac / Maint / Mgmt: −$745
• Net cashflow: $-528/mo
• Annual: $-6,335/yr
• Cap rate: 4.71%
• Cash-on-cash: -5.66%
• DSCR: 0.75
• 1% rule: 0.89%
• Cash to close: $112,000

Investor read

• This is a 4-bed/3.0-bath single-family listed at $400k. Condition is rated good.
• At list price, monthly cash flow is $-528 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $307k (23.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $355k (11.3% below list).
• It's been on market 21 days — a 2% lower offer ($394k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $307k (23.3% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#450 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A; Watch: cost of living C-, amenities F, commute F.
• Celina ISD (rural): math 50% / reading 61% proficiency, ranked #71 of 826 in TX (top 9%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: O'Dell El (math 55% / reading 67%, grade B, #368 of 4,322 statewide, top 9%, 826 students, 15% FRL); Jerry & Linda Moore Middle (math 56% / reading 60%, grade B, #197 of 1,662 statewide, top 12%, 903 students, 20% FRL); Celina H S (math 44% / reading 72%, grade C, #320 of 1,632 statewide, top 20%, 1,074 students, 18% FRL).
• Watch-outs: property tax is 2.8% of price.
• Market conditions: Rents falling (-4.6%/yr); 3878 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals lingering (median 68d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 71% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 19,194 units permitted in Collin County in 2024 (3,988 in 5+ unit buildings).
• Collin County population projected at +60% 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 $165k (29%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 4.7% vs local median 2.9% in Celina — 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?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.