401 Barnett St

Kerrville, TX 78028

$225,000D

3 bd · 1.0 ba · 952 sqft · Built 1965 · SingleFamily · Pending · 60 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,740/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$311
• HOA: −$0
• Vac / Maint / Mgmt: −$365
• Net cashflow: $-116/mo
• Annual: $-1,396/yr
• Cap rate: 5.67%
• Cash-on-cash: -2.22%
• DSCR: 0.90
• 1% rule: 0.77%
• Cash to close: $63,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-116 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (9.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $174k (22.6% below list).
• It's been on market 60 days — a 3% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $174k (22.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#25 in TX, #1,483 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: employment C-, commute F.
• Kerrville ISD (town): math 45% / reading 51% proficiency, ranked #220 of 826 in TX (top 27%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Fred H Tally El (math 59% / reading 58%, grade B-, #467 of 4,322 statewide, top 11%, 544 students, 50% FRL); Peterson Middle (math 39% / reading 50%, grade D, #491 of 1,662 statewide, top 31%, 1,075 students, 52% FRL); Tivy H S (math 42% / reading 60%, grade D+, #482 of 1,632 statewide, top 30%, 1,468 students, 47% FRL).
• Market conditions: Rents rising (+3.0%/yr); 751 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 422 units permitted in Kerr County in 2024 (322 in 5+ unit buildings).
• Kerr County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 52% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 2.0% in Kerrville — 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.
• This rent runs 31% of the median local income ($67k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 60 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• Built in 1965 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.