Berkshire Plan

Splendora, TX 77372

$119,900F

3 bd · 2.0 ba · 1,440 sqft · Built — · Manufactured · Active · 533 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,236/mo
• Mortgage (P&I): −$1,124
• Tax + insurance: −$357
• HOA: −$0
• Vac / Maint / Mgmt: −$260
• Net cashflow: $-504/mo
• Annual: $-6,047/yr
• Cap rate: 3.47%
• Cash-on-cash: -10.08%
• DSCR: 0.55
• 1% rule: 0.58%
• Cash to close: $59,991

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $120k. Condition is rated excellent.
• At list price, monthly cash flow is $-504 ($-6k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $120k).
• It's been on market 533 days — a 12% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (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 62/100 on livability (#911 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Splendora ISD (rural): math 25% / reading 31% proficiency, ranked #648 of 826 in TX (top 78%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Piney Woods El (math 23% / reading 28%, grade F, #2,982 of 4,322 statewide, top 70%, 534 students, 55% FRL); Splendora J H (math 28% / reading 42%, grade F, #842 of 1,662 statewide, top 51%, 774 students, 62% FRL); Splendora H S (math 18% / reading 38%, grade F, #1,170 of 1,632 statewide, top 72%, 1,344 students, 59% FRL) — zoned schools at 59% FRL track the district average.
• Watch-outs: property tax is 2.7% of price.
• Market conditions: 845 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals lingering (median 64d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 13,259 units permitted in Montgomery County in 2024 (1,402 in 5+ unit buildings).
• Montgomery County population projected at +65% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 3.5% vs local median 5.2% in Splendora — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 533 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• 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.