1217 Montgomery St

Memphis, TX 79245

$40,000B+

4 bd · 4.0 ba · 702 sqft · Built 1930 · Other · Active · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $933/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$64
• HOA: −$0
• Vac / Maint / Mgmt: −$196
• Net cashflow: $464/mo
• Annual: $5,564/yr
• Cap rate: 20.20%
• Cash-on-cash: 49.68%
• DSCR: 3.21
• 1% rule: 2.33%
• Cash to close: $11,200

Investor read

• This is a 4-bed/4.0-bath other listed at $40k.
• At list price, monthly cash flow is $464 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($933 rent vs $40k).
• It's been on market 44 days — a 3% lower offer ($39k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $39k (3.0% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($277 loan paydown + $2k appreciation (4.5% local appreciation)).
• Location reads 64/100 on livability (#754 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment F.
• Memphis ISD (rural): math 34% / reading 36% proficiency, ranked #555 of 826 in TX (top 67%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Austin El (math 27% / reading 37%, grade F, #2,268 of 4,322 statewide, top 55%, 127 students, 83% FRL); Memphis Middle (math 37% / reading 37%, grade F, #756 of 1,662 statewide, top 47%, 89 students, 90% FRL); Memphis H S (math 50% / reading 34%, grade F, #730 of 1,632 statewide, top 47%, 141 students, 70% FRL) — zoned schools average 81% FRL vs 61% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 20 active listings in the ZIP.
• Hall County population projected at -23% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (4.5% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 44 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1930 — 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 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?
• 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.