Magnolia II Plan

DeSoto, TX 75115

$514,990F

4 bd · 2.5 ba · 3,430 sqft · Built — · SingleFamily · Active · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,894/mo
• Mortgage (P&I): −$3,041
• Tax + insurance: −$966
• HOA: −$0
• Vac / Maint / Mgmt: −$608
• Net cashflow: $-1,721/mo
• Annual: $-20,654/yr
• Cap rate: 2.73%
• Cash-on-cash: -12.72%
• DSCR: 0.43
• 1% rule: 0.50%
• Cash to close: $162,353

Investor read

• This is a 4-bed/2.5-bath single-family listed at $515k. Condition is rated excellent.
• At list price, monthly cash flow is $-2k ($-21k/yr) — negative.
• To cash-flow at today's rent, offer at most $331k (35.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $289k (43.8% below list).
• It's been on market 83 days — a 6% lower offer ($484k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $289k (43.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#589 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools D+, amenities F, commute F.
• Duncanville ISD (suburban): math 20% / reading 29% proficiency, ranked #711 of 826 in TX (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents soft (-2.6%/yr); 747 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 101d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 12,577 units permitted in Dallas County in 2024 (6,829 in 5+ unit buildings).
• Dallas County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.7% vs local median 3.4% in DeSoto — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 42% of the median local income ($83k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• It's been on market 83 days. Have you received any prior offers? Is the seller open to a 44% concession, seller financing, or rate buy-down credit?
• 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?
• 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.