1414 Rice Ave

Gainesville, TX 76240

$121,000B

3 bd · 1.0 ba · 1,536 sqft · Built 1950 · SingleFamily · Pending · 63 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,789/mo
• Mortgage (P&I): −$635
• Tax + insurance: −$388
• HOA: −$0
• Vac / Maint / Mgmt: −$376
• Net cashflow: $391/mo
• Annual: $4,687/yr
• Cap rate: 10.17%
• Cash-on-cash: 13.83%
• DSCR: 1.62
• 1% rule: 1.48%
• Cash to close: $33,880

Investor read

• This is a 3-bed/1.0-bath single-family listed at $121k.
• At list price, monthly cash flow is $391 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $121k).
• It's been on market 63 days — a 6% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $837 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#602 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: schools F, amenities F, commute F.
• Gainesville ISD (rural): math 33% / reading 29% proficiency, ranked #606 of 826 in TX (top 73%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 3.3% of price; built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 462 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 190 units permitted in Cooke County in 2024 (0 in 5+ unit buildings).
• 3 sale attempts since 7y ago; this cycle's ask has dropped $10k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $34k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.2% vs local median 3.7% in Gainesville — 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 30% of the median local income ($72k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 63 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1950 — 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 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.