735 Highland Dr

Beaumont, TX 77705

$59,900C

2 bd · 1.0 ba · 940 sqft · Built 1962 · SingleFamily · Pending · 72 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $812/mo
• Mortgage (P&I): −$314
• Tax + insurance: −$155
• HOA: −$0
• Vac / Maint / Mgmt: −$171
• Net cashflow: $172/mo
• Annual: $2,064/yr
• Cap rate: 9.74%
• Cash-on-cash: 12.31%
• DSCR: 1.55
• 1% rule: 1.36%
• Cash to close: $16,772

Investor read

• This is a 2-bed/1.0-bath single-family listed at $60k.
• At list price, monthly cash flow is $172 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($812 rent vs $60k).
• It's been on market 72 days — a 6% lower offer ($56k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $56k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $414 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#739 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, crime F, amenities F.
• Beaumont ISD (urban): math 14% / reading 22% proficiency, ranked #789 of 826 in TX (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Pietzsch/Mac Arthur El (math 5% / reading 7%, grade F, #4,315 of 4,322 statewide, top 100%, 1,083 students, 97% FRL); M L King Middle (math 6% / reading 12%, grade F, #1,653 of 1,662 statewide, top 99%, 480 students, 91% FRL); Beaumont United H S (math 8% / reading 16%, grade F, #1,554 of 1,632 statewide, top 95%, 2,131 students, 86% FRL) — zoned schools average 91% FRL vs 69% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.6% of price.
• Market conditions: 207 active listings in the ZIP; 25 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 48% of comp listings sitting > 30 days — soft ceiling on asking rent; 343 units permitted in Jefferson County in 2024 (0 in 5+ unit buildings).
• 7 sale attempts since 6y ago; this cycle's ask has dropped $4k (6%) 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 $17k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.7% vs local median 5.3% in Beaumont — 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 is only 18% of the median local income ($55k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• It's been on market 72 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1962 — 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 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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.