142 Cotton Thompson Rd

Lufkin, TX 75901

$125,000D

3 bd · 2.0 ba · 1,216 sqft · Built 1998 · Manufactured · Active · 265 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,104/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$220
• HOA: −$0
• Vac / Maint / Mgmt: −$232
• Net cashflow: $-4/mo
• Annual: $-45/yr
• Cap rate: 6.26%
• Cash-on-cash: -0.13%
• DSCR: 0.99
• 1% rule: 0.88%
• Cash to close: $35,000

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $125k.
• At list price, monthly cash flow is $-4 ($-45/yr) — negative.
• To cash-flow at today's rent, offer at most $124k (0.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $110k (11.7% below list).
• It's been on market 265 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#240 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, commute F, employment D-.
• Diboll ISD (town): math 45% / reading 37% proficiency, ranked #394 of 826 in TX (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: H G Temple El (314 students, 74% FRL); Diboll J H (math 49% / reading 29%, grade F, #690 of 1,662 statewide, top 42%, 349 students, 71% FRL); Diboll H S (math 47% / reading 47%, grade D-, #591 of 1,632 statewide, top 38%, 521 students, 56% FRL) — zoned schools at 67% FRL track the district average.
• Market conditions: 297 active listings in the ZIP; 120 units permitted in Angelina County in 2024 (0 in 5+ unit buildings).
• 3 sale attempts since 2y ago; this cycle's ask has dropped $21k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 3.5% in Lufkin — 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

• 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 265 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.