114 Sunset Ave

Henderson, TX 75652

$164,900D

2 bd · 1.0 ba · 885 sqft · Built 1928 · SingleFamily · Active · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,209/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$196
• HOA: −$0
• Vac / Maint / Mgmt: −$254
• Net cashflow: $-106/mo
• Annual: $-1,270/yr
• Cap rate: 5.52%
• Cash-on-cash: -2.75%
• DSCR: 0.88
• 1% rule: 0.73%
• Cash to close: $46,172

Investor read

• This is a 2-bed/1.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $-106 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $146k (11.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (26.7% below list).
• It's been on market 25 days — a 2% lower offer ($162k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (26.7% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($1k loan paydown + $10k appreciation (6.1% local appreciation)).
• Location reads 69/100 on livability (#408 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D+, schools D-, crime F.
• Henderson ISD (town): math 30% / reading 35% proficiency, ranked #573 of 826 in TX (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 113 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 4 units permitted in Rusk County in 2024 (0 in 5+ unit buildings).
• Rusk County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• By year 4, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 68% 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 5.5% vs local median 2.9% in Henderson — 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?
• Built in 1928 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.