2406 40th St

Pinehurst, TX 77630

$136,500C

3 bd · 1.0 ba · 1,299 sqft · Built 1956 · SingleFamily · Active · 52 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,332/mo
• Mortgage (P&I): −$716
• Tax + insurance: −$365
• HOA: −$0
• Vac / Maint / Mgmt: −$280
• Net cashflow: $-29/mo
• Annual: $-343/yr
• Cap rate: 6.63%
• Cash-on-cash: 1.19%
• DSCR: 1.05
• 1% rule: 0.98%
• Cash to close: $38,220

Investor read

• This is a 3-bed/1.0-bath single-family listed at $136k.
• At list price, monthly cash flow is $-29 ($-343/yr) — negative.
• To cash-flow at today's rent, offer at most $131k (3.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $133k (2.4% below list).
• It's been on market 52 days — a 3% lower offer ($132k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $131k (3.7% below list) — sets the bar for cash-flow.
• In year one you build about $2k of equity ($944 loan paydown + $1k appreciation (1.0% local appreciation)).
• Location reads 55/100 on livability (#1,350 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing B+; Watch: employment C-, crime D-, amenities F.
• West Orange-Cove CISD (suburban): math 17% / reading 21% proficiency, ranked #784 of 826 in TX (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: West Orange-Stark El (math 14% / reading 17%, grade F, #3,990 of 4,322 statewide, top 93%, 1,130 students, 94% FRL); West Orange-Stark Middle (math 20% / reading 20%, grade F, #1,428 of 1,662 statewide, top 87%, 505 students, 92% FRL); West Orange-Stark H S (math 19% / reading 31%, grade F, #1,250 of 1,632 statewide, top 77%, 660 students, 88% FRL).
• Watch-outs: flood insurance adds $66/mo; built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.7%/yr); 338 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 235 units permitted in Orange County in 2024 (50 in 5+ unit buildings).
• Orange County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 11y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• At projected returns (1.0% appreciation + 5.7% rent growth), your $38k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 2.0% in Pinehurst — 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 52 days. Have you received any prior offers? Is the seller open to a 4% concession, seller financing, or rate buy-down credit?
• Built in 1956 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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.