1326 S Walnut St

Sherman, TX 75090

$120,000C

2 bd · 1.0 ba · 1,260 sqft · Built 1900 · SingleFamily · Pending · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,454/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$273
• HOA: −$0
• Vac / Maint / Mgmt: −$305
• Net cashflow: $247/mo
• Annual: $2,961/yr
• Cap rate: 8.76%
• Cash-on-cash: 8.81%
• DSCR: 1.39
• 1% rule: 1.21%
• Cash to close: $33,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $247 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $120k).
• It's been on market 49 days — a 3% lower offer ($116k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $116k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#1,027 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, employment C-, amenities F.
• Sherman ISD (urban): math 31% / reading 37% proficiency, ranked #546 of 826 in TX (top 66%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Washington El (math 37% / reading 32%, grade F, #1,995 of 4,322 statewide, top 50%, 496 students, 97% FRL) — zoned schools average 97% FRL vs 60% district-wide (37 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-2.7%/yr); 473 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,272 units permitted in Grayson County in 2024 (750 in 5+ unit buildings).
• Grayson County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 3y 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 8.8% vs local median 3.7% in Sherman — 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 31% of the median local income ($56k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 49 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.