704 Davison St

Newton, TX 75966

$89,900B+

3 bd · 2.0 ba · 1,672 sqft · Built 1940 · SingleFamily · Active · 94 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,226/mo
• Mortgage (P&I): −$471
• Tax + insurance: −$201
• HOA: −$0
• Vac / Maint / Mgmt: −$258
• Net cashflow: $297/mo
• Annual: $3,561/yr
• Cap rate: 10.25%
• Cash-on-cash: 14.15%
• DSCR: 1.63
• 1% rule: 1.36%
• Cash to close: $25,172

Investor read

• This is a 3-bed/2.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $297 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $90k).
• It's been on market 94 days — a 9% lower offer ($82k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $82k (9.0% below list) — sets the bar for market timing.
• In year one you build about $4k of equity ($622 loan paydown + $3k appreciation (3.5% local appreciation)).
• Location reads 55/100 on livability (#1,355 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+, crime B; Watch: schools F, amenities F, commute F.
• Newton ISD (rural): math 23% / reading 36% proficiency, ranked #661 of 826 in TX (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 79 active listings in the ZIP.
• Newton County population projected at -21% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (3.5% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 94 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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.