707 Ritchey St

Gainesville, TX 76240

$100,000B

2 bd · 2.0 ba · 890 sqft · Built 1945 · SingleFamily · Pending · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,332/mo
• Mortgage (P&I): −$524
• Tax + insurance: −$241
• HOA: −$0
• Vac / Maint / Mgmt: −$280
• Net cashflow: $286/mo
• Annual: $3,437/yr
• Cap rate: 9.73%
• Cash-on-cash: 12.27%
• DSCR: 1.55
• 1% rule: 1.33%
• Cash to close: $28,000

Investor read

• This is a 2-bed/2.0-bath single-family listed at $100k.
• At list price, monthly cash flow is $286 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $100k).
• It's been on market 32 days — a 3% lower offer ($97k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $97k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $691 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#602 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: amenities F, commute F, employment F.
• Gainesville ISD (rural): math 33% / reading 29% proficiency, ranked #606 of 826 in TX (top 73%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: W E Chalmers El (math 28% / reading 24%, grade F, #2,954 of 4,322 statewide, top 69%, 716 students, 67% FRL) — zoned schools at 67% FRL track the district average.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 462 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 190 units permitted in Cooke County in 2024 (0 in 5+ unit buildings).
• 3 sale attempts since 4y 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 (-3.0% appreciation + 3.0% rent growth), your $28k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.7% vs local median 3.7% in Gainesville — 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

• It's been on market 32 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1945 — 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.