RC Somerville Plan

San Antonio, TX 78264

$227,900D+

3 bd · 2.0 ba · 1,402 sqft · Built — · SingleFamily · Active · 424 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,800/mo
• Mortgage (P&I): −$1,125
• Tax + insurance: −$358
• HOA: −$0
• Vac / Maint / Mgmt: −$378
• Net cashflow: $-60/mo
• Annual: $-725/yr
• Cap rate: 5.96%
• Cash-on-cash: -1.21%
• DSCR: 0.95
• 1% rule: 0.84%
• Cash to close: $60,062

Investor read

• This is a 3-bed/2.0-bath single-family listed at $228k.
• At list price, monthly cash flow is $-60 ($-725/yr) — negative.
• To cash-flow at today's rent, offer at most $206k (9.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $180k (21.0% below list).
• It's been on market 424 days — a 12% lower offer ($201k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $180k (21.0% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($1k loan paydown + $8k appreciation (3.9% local appreciation)).
• Location reads 80/100 on livability (#31 in TX, #1,616 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools C-, crime F.
• Somerset ISD (rural): math 41% / reading 39% proficiency, ranked #417 of 826 in TX (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 359 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 8,308 units permitted in Bexar County in 2024 (2,506 in 5+ unit buildings).
• Bexar County population projected at +50% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (3.9% appreciation + 3.0% rent growth), your $60k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; 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 6.0% vs local median 3.8% in San Antonio — 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 424 days. Have you received any prior offers? Is the seller open to a 21% 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.
• 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.