1721 Emma Pearl

Paloma Creek South, TX 75068

$345,000D-

4 bd · 3.0 ba · 3,275 sqft · Built 2018 · SingleFamily · Pending · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,098/mo
• Mortgage (P&I): −$1,809
• Tax + insurance: −$1,035
• HOA: −$92
• Vac / Maint / Mgmt: −$651
• Net cashflow: $-488/mo
• Annual: $-5,861/yr
• Cap rate: 4.59%
• Cash-on-cash: -6.07%
• DSCR: 0.73
• 1% rule: 0.90%
• Cash to close: $96,600

Investor read

• This is a 4-bed/3.0-bath single-family listed at $345k.
• At list price, monthly cash flow is $-488 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $259k (25.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $310k (10.2% below list).
• It's been on market 20 days — a 2% lower offer ($340k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $259k (25.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#1,039 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: schools C-, amenities F, commute F.
• Denton ISD (urban): math 36% / reading 43% proficiency, ranked #383 of 826 in TX (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 3.1% of price.
• Market conditions: Rents soft (-1.5%/yr); 1306 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 10,531 units permitted in Denton County in 2024 (2,713 in 5+ unit buildings).
• Denton County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $48k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: extreme-heat days projected 8→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.