710 S Magnolia St

Palestine, TX 75801

$208,000D

5 bd · 2.5 ba · 3,744 sqft · Built 1910 · SingleFamily · Active · 263 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,974/mo
• Mortgage (P&I): −$1,091
• Tax + insurance: −$598
• HOA: −$0
• Vac / Maint / Mgmt: −$415
• Net cashflow: $-129/mo
• Annual: $-1,548/yr
• Cap rate: 5.55%
• Cash-on-cash: -2.66%
• DSCR: 0.88
• 1% rule: 0.95%
• Cash to close: $58,240

Investor read

• This is a 5-bed/2.5-bath single-family listed at $208k.
• At list price, monthly cash flow is $-129 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $185k (11.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $197k (5.1% below list).
• It's been on market 263 days — a 12% lower offer ($183k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $183k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#657 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime D+, employment D, amenities F.
• Palestine ISD (town): math 36% / reading 37% proficiency, ranked #509 of 826 in TX (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Northside Pri (465 students, 80% FRL); Story Int (math 32% / reading 31%, grade F, #997 of 1,662 statewide, top 61%, 673 students, 80% FRL); Palestine H S (math 44% / reading 41%, grade F, #721 of 1,632 statewide, top 45%, 998 students, 77% FRL).
• Watch-outs: property tax is 2.9% of price; built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 201 active listings in the ZIP; 29 units permitted in Anderson County in 2024 (0 in 5+ unit buildings).
• Anderson County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $17k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 74% chance of damaging wind over 30y; extreme-heat days projected 7→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.5% vs local median 3.9% in Palestine — 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 42% of the median local income ($57k/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 263 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?
• Crime grade is D 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?