1203 Highland Ave

Rockdale, TX 76567

$137,000C

3 bd · 1.0 ba · 1,709 sqft · Built — · SingleFamily · Active · 53 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,650/mo
• Mortgage (P&I): −$718
• Tax + insurance: −$286
• HOA: −$0
• Vac / Maint / Mgmt: −$346
• Net cashflow: $299/mo
• Annual: $3,587/yr
• Cap rate: 8.91%
• Cash-on-cash: 9.35%
• DSCR: 1.42
• 1% rule: 1.20%
• Cash to close: $38,360

Investor read

• This is a 3-bed/1.0-bath single-family listed at $137k.
• At list price, monthly cash flow is $299 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $137k).
• It's been on market 53 days — a 3% lower offer ($133k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $133k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $947 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#1,040 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools D, crime F, amenities F.
• Rockdale ISD (town): math 40% / reading 43% proficiency, ranked #395 of 826 in TX (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 161 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 77 units permitted in Milam County in 2024 (0 in 5+ unit buildings).
• Milam County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 6→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.9% vs local median 3.6% in Rockdale — 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

• It's been on market 53 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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?
• 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.