706 Pearson St

Natalia, TX 78059

$82,800B-

3 bd · 1.0 ba · 1,248 sqft · Built 1957 · SingleFamily · Active · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,000/mo
• Mortgage (P&I): −$434
• Tax + insurance: −$136
• HOA: −$0
• Vac / Maint / Mgmt: −$210
• Net cashflow: $220/mo
• Annual: $2,640/yr
• Cap rate: 9.48%
• Cash-on-cash: 11.39%
• DSCR: 1.51
• 1% rule: 1.21%
• Cash to close: $23,184

Investor read

• This is a 3-bed/1.0-bath single-family listed at $83k.
• At list price, monthly cash flow is $220 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $83k).
• It's been on market 79 days — a 6% lower offer ($78k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $78k (6.0% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($572 loan paydown + $2k appreciation (2.3% local appreciation)).
• Location reads 63/100 on livability (#821 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D, schools F, amenities F.
• Natalia ISD (rural): math 16% / reading 30% proficiency, ranked #735 of 826 in TX (top 89%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 75% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 98 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 102 units permitted in Medina County in 2024 (0 in 5+ unit buildings).
• Medina County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (2.3% appreciation + 3.0% rent growth), your $23k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.5% vs local median 1.3% in Natalia — 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 79 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1957 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-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.