403 Elmo St

Cleburne, TX 76031

$145,000D

2 bd · 1.0 ba · 888 sqft · Built 1980 · SingleFamily · Active · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,288/mo
• Mortgage (P&I): −$760
• Tax + insurance: −$323
• HOA: −$0
• Vac / Maint / Mgmt: −$271
• Net cashflow: $-66/mo
• Annual: $-790/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.95%
• DSCR: 0.91
• 1% rule: 0.89%
• Cash to close: $40,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $145k.
• At list price, monthly cash flow is $-66 ($-790/yr) — negative.
• To cash-flow at today's rent, offer at most $133k (8.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $129k (11.1% below list).
• It's been on market 19 days — a 2% lower offer ($143k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $129k (11.1% 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 68/100 on livability (#460 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, amenities F, commute F.
• Cleburne ISD (town): math 34% / reading 33% proficiency, ranked #537 of 826 in TX (top 65%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Irving El (math 26% / reading 26%, grade F, #2,954 of 4,322 statewide, top 69%, 521 students, 83% FRL); Ad Wheat Middle (math 31% / reading 29%, grade F, #1,056 of 1,662 statewide, top 65%, 703 students, 76% FRL); Cleburne H S (math 46% / reading 38%, grade F, #730 of 1,632 statewide, top 47%, 1,976 students, 67% FRL) — zoned schools average 75% FRL vs 56% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 338 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); 2,152 units permitted in Johnson County in 2024 (76 in 5+ unit buildings).
• Johnson County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 4y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 3.6% in Cleburne — 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

• 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?
• 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.