Sweetwater III Plan

Lavon, TX 75166

$369,990F

4 bd · 2.5 ba · 2,455 sqft · Built — · SingleFamily · Active · 290 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,875/mo
• Mortgage (P&I): −$2,615
• Tax + insurance: −$831
• HOA: −$0
• Vac / Maint / Mgmt: −$604
• Net cashflow: $-1,175/mo
• Annual: $-14,098/yr
• Cap rate: 3.47%
• Cash-on-cash: -10.10%
• DSCR: 0.55
• 1% rule: 0.58%
• Cash to close: $139,610

Investor read

• This is a 4-bed/2.5-bath single-family listed at $370k.
• At list price, monthly cash flow is $-1k ($-14k/yr) — negative.
• To cash-flow at today's rent, offer at most $329k (11.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $287k (22.3% below list).
• It's been on market 290 days — a 12% lower offer ($326k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $287k (22.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#588 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, cost of living B; Watch: amenities F, commute F, health & safety F.
• Community ISD (rural): math 30% / reading 38% proficiency, ranked #479 of 826 in TX (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 634 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 19,194 units permitted in Collin County in 2024 (3,988 in 5+ unit buildings).
• Collin County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $22k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 3.5% vs local median 4.5% in Lavon — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 290 days. Have you received any prior offers? Is the seller open to a 22% 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.
• 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.