1240 N Cowan Ave

Lewisville, TX 75057

$78,000B-

2 bd · 2.0 ba · 289 sqft · Built 2020 · Land · Active · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,368/mo
• Mortgage (P&I): −$409
• Tax + insurance: −$130
• HOA: −$0
• Vac / Maint / Mgmt: −$287
• Net cashflow: $542/mo
• Annual: $6,503/yr
• Cap rate: 14.63%
• Cash-on-cash: 29.77%
• DSCR: 2.32
• 1% rule: 1.75%
• Cash to close: $21,840

Investor read

• This is a 2-bed/2.0-bath land listed at $78k.
• At list price, monthly cash flow is $542 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $78k).
• It's been on market 26 days — a 2% lower offer ($77k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $77k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $539 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#440 in TX) — a middle-class / working-renter tenant base. Strengths: housing A+, cost of living A, crime B+; Watch: commute D+, amenities F, health & safety F.
• Lewisville ISD (suburban): math 49% / reading 54% proficiency, ranked #109 of 826 in TX (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Delay Middle (math 18% / reading 27%, grade F, #1,341 of 1,662 statewide, top 82%, 690 students, 89% FRL); Lewisville H S (math 33% / reading 41%, grade F, #897 of 1,632 statewide, top 57%, 4,240 students, 67% FRL) — zoned schools average 78% FRL vs 26% district-wide (52 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 30% at this address vs 52% district-wide (-22 pts) — the specific schools serving this property underperform the Lewisville ISD average; the district grade overstates school quality for this exact location.
• Market conditions: Rents falling (-3.3%/yr); 37 active listings in the ZIP; solid renter incomes; 10,531 units permitted in Denton County in 2024 (2,713 in 5+ unit buildings).
• Denton County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $22k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wind risk, 26% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.6% vs local median 3.2% in Lewisville — 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

• 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.