407 Clay St

Eagle Lake, TX 77434

$19,000D+

2 bd · 1.0 ba · 1,064 sqft · Built 1940 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $975/mo
• Mortgage (P&I): −$100
• Tax + insurance: −$85
• HOA: −$0
• Vac / Maint / Mgmt: −$205
• Net cashflow: $585/mo
• Annual: $7,025/yr
• Cap rate: 43.27%
• Cash-on-cash: 132.05%
• DSCR: 6.88
• 1% rule: 5.13%
• Cash to close: $5,320

Investor read

• This is a 2-bed/1.0-bath single-family listed at $19k.
• At list price, monthly cash flow is $585 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($975 rent vs $19k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $378 of equity ($131 loan paydown + $247 appreciation (1.3% local appreciation)).
• Location reads 62/100 on livability (#913 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, crime A-, housing B+; Watch: amenities F, commute F, employment D-.
• Rice CISD (rural): math 34% / reading 32% proficiency, ranked #574 of 826 in TX (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Eagle Lake Int (math 37% / reading 27%, grade F, #2,268 of 4,322 statewide, top 55%, 180 students, 87% FRL) — zoned schools average 87% FRL vs 68% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 4.9% of price; built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 59 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 29 units permitted in Colorado County in 2024 (0 in 5+ unit buildings).
• At projected returns (1.3% appreciation + 3.0% rent growth), your $5k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 99% 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 43.3% vs local median 3.7% in Eagle Lake — 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 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?
• 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.