516 S Butte St

Breckenridge, TX 76424

$40,000A-

3 bd · 1.0 ba · 1,064 sqft · Built 1900 · SingleFamily · Active · 116 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $950/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$73
• HOA: −$0
• Vac / Maint / Mgmt: −$200
• Net cashflow: $468/mo
• Annual: $5,611/yr
• Cap rate: 20.32%
• Cash-on-cash: 50.10%
• DSCR: 3.23
• 1% rule: 2.38%
• Cash to close: $11,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $468 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($950 rent vs $40k).
• It's been on market 116 days — a 9% lower offer ($36k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $36k (9.0% below list) — sets the bar for market timing.
• In year one you build about $998 of equity ($277 loan paydown + $721 appreciation (1.8% local appreciation)).
• Location reads 65/100 on livability (#695 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D, schools D-, amenities F.
• Breckenridge ISD (town): math 36% / reading 32% proficiency, ranked #551 of 826 in TX (top 67%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 119 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 2 units permitted in Stephens County in 2024 (0 in 5+ unit buildings).
• Stephens County population projected at +19% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (1.8% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 20.3% vs local median 3.7% in Breckenridge — 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

• It's been on market 116 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.