1040 Canyon Dr

Justin, TX 76247

$425,000D-

4 bd · 2.5 ba · 3,095 sqft · Built 2001 · SingleFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,271/mo
• Mortgage (P&I): −$2,229
• Tax + insurance: −$897
• HOA: −$0
• Vac / Maint / Mgmt: −$687
• Net cashflow: $-542/mo
• Annual: $-6,500/yr
• Cap rate: 4.76%
• Cash-on-cash: -5.46%
• DSCR: 0.76
• 1% rule: 0.77%
• Cash to close: $119,000

Investor read

• This is a 4-bed/2.5-bath single-family listed at $425k.
• At list price, monthly cash flow is $-542 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $329k (22.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $327k (23.0% below list).
• It's been on market 55 days — a 3% lower offer ($412k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $327k (23.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#443 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Northwest ISD (rural): math 48% / reading 52% proficiency, ranked #120 of 826 in TX (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Justin El (math 40% / reading 44%, grade F, #1,335 of 4,322 statewide, top 33%, 605 students, 24% FRL) — zoned schools at 24% FRL track the district average.
• Market conditions: Rents soft (-0.5%/yr); 1503 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 18d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 10,531 units permitted in Denton County in 2024 (2,713 in 5+ unit buildings).
• Denton County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 7y 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.
• Climate carrying-cost: 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 4.8% vs local median 3.5% in Justin — 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.
• This rent runs 32% of the median local income ($124k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 55 days. Have you received any prior offers? Is the seller open to a 23% 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.
• 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.
• 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.