Passionflower II ESP Plan

Rhome, TX 76071

$364,900F

4 bd · 3.0 ba · 2,102 sqft · Built — · SingleFamily · Active · 191 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,514/mo
• Mortgage (P&I): −$2,293
• Tax + insurance: −$729
• HOA: −$0
• Vac / Maint / Mgmt: −$528
• Net cashflow: $-1,036/mo
• Annual: $-12,427/yr
• Cap rate: 3.45%
• Cash-on-cash: -10.15%
• DSCR: 0.55
• 1% rule: 0.58%
• Cash to close: $122,441

Investor read

• This is a 4-bed/3.0-bath single-family listed at $365k.
• At list price, monthly cash flow is $-1k ($-12k/yr) — negative.
• To cash-flow at today's rent, offer at most $287k (21.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $251k (31.1% below list).
• It's been on market 191 days — a 12% lower offer ($321k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $251k (31.1% 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 74/100 on livability (#165 in TX, #4,376 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: schools D-, amenities F, commute F.
• Northwest ISD (rural): math 48% / reading 52% proficiency, ranked #120 of 826 in TX (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 82 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 460 units permitted in Wise County in 2024 (243 in 5+ unit buildings).
• Wise County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: moderate wind risk, 26% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 191 days. Have you received any prior offers? Is the seller open to a 31% 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.
• 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.