405 W 1st St

Hedley, TX 79237

$20,000D+

3 bd · 1.0 ba · 1,048 sqft · Built 2021 · SingleFamily · Active · 145 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $940/mo
• Mortgage (P&I): −$105
• Tax + insurance: −$33
• HOA: −$0
• Vac / Maint / Mgmt: −$197
• Net cashflow: $604/mo
• Annual: $7,250/yr
• Cap rate: 42.54%
• Cash-on-cash: 129.47%
• DSCR: 6.76
• 1% rule: 4.70%
• Cash to close: $5,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $20k. Condition is rated poor.
• At list price, monthly cash flow is $604 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($940 rent vs $20k).
• It's been on market 145 days — a 12% lower offer ($18k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $18k (12.0% below list) — sets the bar for market timing.
• In year one you build about $738 of equity ($138 loan paydown + $600 appreciation (3.0% local appreciation)).
• Location reads 55/100 on livability (#1,348 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+; Watch: crime F, amenities F, commute F.
• Hedley ISD (rural): math 60% / reading 50% proficiency, ranked #236 of 1,141 in TX (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 1 active listings in the ZIP; 1 units permitted in Donley County in 2024 (0 in 5+ unit buildings).
• Donley County population projected at -26% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $6k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→20/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 145 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.

Repairs flagged (vision-AI assessment)

• Major: exterior overgrowth — Vegetation obscures the entire exterior
• Major: exterior siding — Cannot determine condition due to overgrowth