Canon Plan

Fredericksburg, TX 78624

$379,999F

5 bd · 3.0 ba · 2,813 sqft · Built — · SingleFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,327/mo
• Mortgage (P&I): −$3,496
• Tax + insurance: −$1,111
• HOA: −$0
• Vac / Maint / Mgmt: −$699
• Net cashflow: $-1,979/mo
• Annual: $-23,746/yr
• Cap rate: 2.73%
• Cash-on-cash: -12.72%
• DSCR: 0.43
• 1% rule: 0.50%
• Cash to close: $186,671

Investor read

• This is a 5-bed/3.0-bath single-family listed at $380k. Condition is rated excellent.
• At list price, monthly cash flow is $-2k ($-24k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $333k (12.4% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $333k (12.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $20k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#182 in TX, #4,711 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, health & safety B+, cost of living B; Watch: employment C-, amenities D, commute F.
• Fredericksburg ISD (town): math 44% / reading 48% proficiency, ranked #241 of 826 in TX (top 29%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 2.6% of price.
• Market conditions: 966 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 52 units permitted in Gillespie County in 2024 (0 in 5+ unit buildings).
• Gillespie County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 2.7% vs local median 1.7% in Fredericksburg — 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.
• At $3,327/mo this rent would consume 53% of the median local household income ($75k/yr) (locally 470% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.