7405 Waco Ave

Lubbock, TX 79423

$310,000B-

4 bd · 4.0 ba · 3,048 sqft · Built 1983 · MultiFamily · Active · 86 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,816/mo
• Mortgage (P&I): −$1,626
• Tax + insurance: −$431
• HOA: −$0
• Vac / Maint / Mgmt: −$801
• Net cashflow: $958/mo
• Annual: $11,496/yr
• Cap rate: 10.00%
• Cash-on-cash: 13.24%
• DSCR: 1.59
• 1% rule: 1.23%
• Cash to close: $86,800

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $310k.
• At list price, monthly cash flow is $958 ($11k/yr) — positive. Per door: $239/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $310k).
• It's been on market 86 days — a 6% lower offer ($291k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $291k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#37 in TX, #1,749 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, schools D+, crime F.
• Lubbock ISD (urban): math 36% / reading 39% proficiency, ranked #481 of 826 in TX (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+2.1%/yr); 663 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 2,219 units permitted in Lubbock County in 2024 (252 in 5+ unit buildings).
• Lubbock County population projected at +39% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y 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.
• At projected returns (-3.0% appreciation + 2.1% rent growth), your $87k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $3,816/mo this rent would consume 54% of the median local household income ($85k/yr) (locally 1385% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 86 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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 F 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.