718 Ave. K

Hereford, TX 79045

$118,000D

2 bd · 1.0 ba · 1,009 sqft · Built 1960 · SingleFamily · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,000/mo
• Mortgage (P&I): −$619
• Tax + insurance: −$112
• HOA: −$0
• Vac / Maint / Mgmt: −$210
• Net cashflow: $59/mo
• Annual: $708/yr
• Cap rate: 6.89%
• Cash-on-cash: 2.14%
• DSCR: 1.10
• 1% rule: 0.85%
• Cash to close: $33,040

Investor read

• This is a 2-bed/1.0-bath single-family listed at $118k.
• At list price, monthly cash flow is $59 ($708/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $100k (15.3% below list).
• It's been on market 30 days — a 2% lower offer ($116k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $100k (15.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $816 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#372 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: employment C-, amenities F, commute F.
• Hereford ISD (town): math 41% / reading 38% proficiency, ranked #434 of 826 in TX (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Aikman El (math 47% / reading 42%, grade F, #1,155 of 4,322 statewide, top 29%, 378 students, 92% FRL); Hereford J H (math 29% / reading 33%, grade F, #1,015 of 1,662 statewide, top 62%, 599 students, 82% FRL); Hereford H S (math 43% / reading 39%, grade F, #774 of 1,632 statewide, top 49%, 1,176 students, 81% FRL).
• Market conditions: 106 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 23 units permitted in Deaf Smith County in 2024 (0 in 5+ unit buildings).
• Deaf Smith County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.