265 W Shirley St

Stephenville, TX 76401

$157,000B-

3 bd · 1.0 ba · 1,296 sqft · Built 1947 · SingleFamily · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,772/mo
• Mortgage (P&I): −$823
• Tax + insurance: −$287
• HOA: −$0
• Vac / Maint / Mgmt: −$372
• Net cashflow: $289/mo
• Annual: $3,467/yr
• Cap rate: 8.50%
• Cash-on-cash: 7.89%
• DSCR: 1.35
• 1% rule: 1.13%
• Cash to close: $43,960

Investor read

• This is a 3-bed/1.0-bath single-family listed at $157k.
• At list price, monthly cash flow is $289 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $157k).
• It's been on market 27 days — a 2% lower offer ($155k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $155k (1.5% 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 $5k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#124 in TX, #3,840 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F, employment D-.
• Stephenville ISD (town): math 53% / reading 48% proficiency, ranked #191 of 826 in TX (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Hook El (math 61% / reading 46%, grade C, #686 of 4,322 statewide, top 16%, 569 students, 53% FRL); Henderson J H (math 60% / reading 50%, grade B-, #248 of 1,662 statewide, top 15%, 551 students, 48% FRL); Stephenville H S (math 45% / reading 56%, grade D+, #492 of 1,632 statewide, top 30%, 1,127 students, 45% FRL).
• Watch-outs: built in 1947 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 385 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 110 units permitted in Erath County in 2024 (61 in 5+ unit buildings).
• Erath County population projected at +55% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 19y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: moderate flood risk; 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.
• Cap rate 8.5% vs local median 2.2% in Stephenville — 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 35% of the median local income ($61k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1947 — 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.
• 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.