404 S Mill St

Flatonia, TX 78941

$195,000C+

3 bd · 2.0 ba · 1,512 sqft · Built 2001 · Other · Active · 243 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,089/mo
• Mortgage (P&I): −$1,023
• Tax + insurance: −$149
• HOA: −$0
• Vac / Maint / Mgmt: −$439
• Net cashflow: $479/mo
• Annual: $5,754/yr
• Cap rate: 9.24%
• Cash-on-cash: 10.54%
• DSCR: 1.47
• 1% rule: 1.07%
• Cash to close: $54,600

Investor read

• This is a 3-bed/2.0-bath other listed at $195k.
• At list price, monthly cash flow is $479 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $195k).
• It's been on market 243 days — a 12% lower offer ($172k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $172k (12.0% below list) — sets the bar for market timing.
• In year one you build about $7k of equity ($1k loan paydown + $5k appreciation (2.8% local appreciation)).
• Location reads 66/100 on livability (#599 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment B+; Watch: schools D+, amenities F, commute F.
• Flatonia ISD (rural): math 69% / reading 60% proficiency, ranked #43 of 826 in TX (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 80 active listings in the ZIP; 23 units permitted in Fayette County in 2024 (0 in 5+ unit buildings).
• Fayette County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (2.8% appreciation + 3.0% rent growth), your $55k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.2% vs local median 3.1% in Flatonia — 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 243 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.
• 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?
• 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.