1011 N Commerce St

Gainesville, TX 76240

$117,500B

2 bd · 2.0 ba · 1,104 sqft · Built 1940 · SingleFamily · Active · 57 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,641/mo
• Mortgage (P&I): −$616
• Tax + insurance: −$183
• HOA: −$0
• Vac / Maint / Mgmt: −$345
• Net cashflow: $497/mo
• Annual: $5,961/yr
• Cap rate: 11.37%
• Cash-on-cash: 18.12%
• DSCR: 1.81
• 1% rule: 1.40%
• Cash to close: $32,900

Investor read

• This is a 2-bed/2.0-bath single-family listed at $118k.
• At list price, monthly cash flow is $497 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $118k).
• It's been on market 57 days — a 3% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $812 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: amenities F, commute F, employment 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.
• Zoned schools: Edison El (683 students, 81% FRL).
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 461 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 45d 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).
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $33k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: 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 11.4% 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.

Questions for listing agent

• It's been on market 57 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.