2525 Proctor Ave

Waco, TX 76708

$98,900C+

2 bd · 1.0 ba · 1,142 sqft · Built 1939 · SingleFamily · Active · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,345/mo
• Mortgage (P&I): −$519
• Tax + insurance: −$400
• HOA: −$0
• Vac / Maint / Mgmt: −$282
• Net cashflow: $144/mo
• Annual: $1,723/yr
• Cap rate: 8.04%
• Cash-on-cash: 6.22%
• DSCR: 1.28
• 1% rule: 1.36%
• Cash to close: $27,692

Investor read

• This is a 2-bed/1.0-bath single-family listed at $99k.
• At list price, monthly cash flow is $144 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $99k).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $684 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#166 in TX, #4,378 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D, commute F, employment D-.
• Waco ISD (urban): math 20% / reading 24% proficiency, ranked #773 of 826 in TX (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Dean Highland El (math 15% / reading 20%, grade F, #3,805 of 4,322 statewide, top 89%, 598 students, 93% FRL); Indian Spring Middle (math 15% / reading 17%, grade F, #1,543 of 1,662 statewide, top 94%, 404 students, 95% FRL, charter); Waco H S (math 26% / reading 24%, grade F, #1,250 of 1,632 statewide, top 77%, 2,011 students, 88% FRL).
• Watch-outs: property tax is 4.4% of price; built in 1939 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.8%/yr); 381 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 1,014 units permitted in McLennan County in 2024 (200 in 5+ unit buildings).
• McLennan County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 60% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.0% vs local median 3.9% in Waco — 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

• Built in 1939 — 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?
• 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 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.