702 N Ave O

Lamesa, TX 79331

$55,000B-

3 bd · 1.0 ba · 891 sqft · Built 1950 · SingleFamily · Active · 245 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,100/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$90
• HOA: −$0
• Vac / Maint / Mgmt: −$231
• Net cashflow: $490/mo
• Annual: $5,884/yr
• Cap rate: 16.99%
• Cash-on-cash: 38.21%
• DSCR: 2.70
• 1% rule: 2.00%
• Cash to close: $15,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $55k.
• At list price, monthly cash flow is $490 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $55k).
• It's been on market 245 days — a 12% lower offer ($48k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $48k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#445 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, schools D, amenities F.
• Lamesa ISD (town): math 19% / reading 26% proficiency, ranked #755 of 826 in TX (top 91%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 51 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 1 units permitted in Dawson County in 2024 (0 in 5+ unit buildings).
• 4 sale attempts since 8y ago; this cycle's ask has dropped $15k (21%) 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 $15k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 245 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1950 — 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 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?
• 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.