503 Plum Dr

Josephine, TX 75173

$225,000C-

4 bd · 2.0 ba · 1,587 sqft · Built 2016 · SingleFamily · Pending · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,042/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$507
• HOA: −$17
• Vac / Maint / Mgmt: −$429
• Net cashflow: $-90/mo
• Annual: $-1,082/yr
• Cap rate: 5.81%
• Cash-on-cash: -1.72%
• DSCR: 0.92
• 1% rule: 0.91%
• Cash to close: $63,000

Investor read

• This is a 4-bed/2.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-90 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $209k (7.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $204k (9.2% below list).
• It's been on market 15 days — a 2% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $204k (9.2% below list) — sets the bar for 1% rule.
• In year one you build about $24k of equity ($2k loan paydown + $22k appreciation (10.0% local appreciation)).
• Location reads 60/100 on livability (#1,076 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: schools F, amenities F, commute F.
• Community ISD (rural): math 30% / reading 38% proficiency, ranked #479 of 826 in TX (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 421 active listings in the ZIP; 27 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); 19,194 units permitted in Collin County in 2024 (3,988 in 5+ unit buildings).
• Collin County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts 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.
• By year 2, paydown + projected appreciation supports a ~$39k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% vs local median 4.4% in Josephine — 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

• 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.