2500 Avenue H

Bay City, TX 77414

$115,000C+

3 bd · 2.0 ba · 1,629 sqft · Built 1940 · SingleFamily · Active · 235 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,446/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$336
• HOA: −$0
• Vac / Maint / Mgmt: −$304
• Net cashflow: $204/mo
• Annual: $2,445/yr
• Cap rate: 8.42%
• Cash-on-cash: 7.59%
• DSCR: 1.34
• 1% rule: 1.26%
• Cash to close: $32,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $115k.
• At list price, monthly cash flow is $204 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $115k).
• It's been on market 235 days — a 12% lower offer ($101k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $101k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $795 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#311 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools F, crime F, commute F.
• Bay City ISD (town): math 31% / reading 31% proficiency, ranked #604 of 826 in TX (top 73%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 3.0% of price; built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 622 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 153 units permitted in Matagorda County in 2024 (0 in 5+ unit buildings).
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 3.4% in Bay City — 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 235 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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?
• 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.