837 Alderwood Dr

Red Oak, TX 75154

$419,990D-

4 bd · 3.0 ba · 2,105 sqft · Built 2025 · Land · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,169/mo
• Mortgage (P&I): −$2,202
• Tax + insurance: −$273
• HOA: −$82
• Vac / Maint / Mgmt: −$666
• Net cashflow: $-53/mo
• Annual: $-642/yr
• Cap rate: 6.14%
• Cash-on-cash: -0.55%
• DSCR: 0.98
• 1% rule: 0.75%
• Cash to close: $117,597

Investor read

• This is a 4-bed/3.0-bath land listed at $420k.
• At list price, monthly cash flow is $-53 ($-642/yr) — negative.
• To cash-flow at today's rent, offer at most $411k (2.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $317k (24.5% below list).
• It's been on market 27 days — a 2% lower offer ($414k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $317k (24.5% 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 (#435 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, cost of living A; Watch: amenities F, commute F.
• Red Oak ISD (suburban): math 40% / reading 36% proficiency, ranked #384 of 826 in TX (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Shields El (math 34% / reading 36%, grade F, #1,965 of 4,322 statewide, top 46%, 563 students, 60% FRL) — zoned schools average 60% FRL vs 42% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.0%/yr); 573 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 3,016 units permitted in Ellis County in 2024 (20 in 5+ unit buildings).
• Ellis County population projected at +36% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.1% vs local median 3.9% in Red Oak — 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 38% of the median local income ($100k/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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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.