727 E 3rd St

McGregor, TX 76657

$149,900C

2 bd · 1.0 ba · 1,113 sqft · Built 1947 · SingleFamily · Pending · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,380/mo
• Mortgage (P&I): −$786
• Tax + insurance: −$161
• HOA: −$0
• Vac / Maint / Mgmt: −$290
• Net cashflow: $143/mo
• Annual: $1,717/yr
• Cap rate: 7.44%
• Cash-on-cash: 4.09%
• DSCR: 1.18
• 1% rule: 0.92%
• Cash to close: $41,972

Investor read

• This is a 2-bed/1.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $143 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $138k (7.9% below list).
• It's been on market 30 days — a 2% lower offer ($148k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $138k (7.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#310 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, employment C-, commute D+.
• Mcgregor ISD (town): math 37% / reading 42% proficiency, ranked #429 of 826 in TX (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 64% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Mcgregor El (math 33% / reading 43%, grade F, #1,709 of 4,322 statewide, top 40%, 454 students, 67% FRL); Isbill J H (math 38% / reading 37%, grade F, #736 of 1,662 statewide, top 45%, 338 students, 63% FRL); Mcgregor H S (math 47% / reading 52%, grade D, #509 of 1,632 statewide, top 34%, 418 students, 58% FRL) — zoned schools at 63% FRL track the district average.
• Watch-outs: built in 1947 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 158 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 1,014 units permitted in McLennan County in 2024 (200 in 5+ unit buildings).
• McLennan County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $30k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 70% 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 7.4% vs local median 3.3% in McGregor — 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

• Built in 1947 — 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 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.