Bayberry III Plan

Denton, TX 76226

$589,990F

5 bd · 3.5 ba · 3,261 sqft · Built — · SingleFamily · Active · 208 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,445/mo
• Mortgage (P&I): −$3,269
• Tax + insurance: −$1,039
• HOA: −$0
• Vac / Maint / Mgmt: −$723
• Net cashflow: $-1,586/mo
• Annual: $-19,031/yr
• Cap rate: 3.24%
• Cash-on-cash: -10.90%
• DSCR: 0.51
• 1% rule: 0.55%
• Cash to close: $174,524

Investor read

• This is a 5-bed/3.5-bath single-family listed at $590k. Condition is rated good.
• At list price, monthly cash flow is $-2k ($-19k/yr) — negative.
• To cash-flow at today's rent, offer at most $394k (33.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $345k (41.6% below list).
• It's been on market 208 days — a 12% lower offer ($519k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $345k (41.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads 88/100 on livability (#2 in TX, #210 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+.
• Argyle ISD (rural): math 71% / reading 67% proficiency, ranked #8 of 826 in TX (top 1%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Zoned schools: Hilltop El (math 62% / reading 57%, grade B-, #409 of 4,322 statewide, top 10%, 636 students, 8% FRL); Argyle Middle (math 73% / reading 63%, grade A-, #73 of 1,662 statewide, top 5%, 1,168 students, 0% FRL); Argyle H S (math 75% / reading 86%, grade A, #36 of 1,632 statewide, top 2%, 1,477 students, 0% FRL).
• Market conditions: Rents rising (+1.6%/yr); 1719 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals lingering (median 70d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 10,531 units permitted in Denton County in 2024 (2,713 in 5+ unit buildings).
• Denton County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→23/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 208 days. Have you received any prior offers? Is the seller open to a 42% 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.