620 E Elm St

Hillsboro, TX 76645

$275,000D

4 bd · 2.0 ba · 2,700 sqft · Built 1945 · SingleFamily · Active · 137 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,485/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$520
• HOA: −$0
• Vac / Maint / Mgmt: −$522
• Net cashflow: $1/mo
• Annual: $15/yr
• Cap rate: 6.30%
• Cash-on-cash: 0.02%
• DSCR: 1.00
• 1% rule: 0.90%
• Cash to close: $77,000

Investor read

• This is a 4-bed/2.0-bath single-family listed at $275k.
• At list price, monthly cash flow is $1 ($15/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $248k (9.6% below list).
• It's been on market 137 days — a 12% lower offer ($242k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $242k (12.0% 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 $8k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#803 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: amenities F, commute F, employment D-.
• Hillsboro ISD (town): math 46% / reading 39% proficiency, ranked #370 of 826 in TX (top 45%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 71% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Hillsboro Int (math 43% / reading 35%, grade F, #690 of 1,662 statewide, top 42%, 429 students, 81% FRL); Hillsboro J H (math 47% / reading 40%, grade D, #530 of 1,662 statewide, top 32%, 272 students, 72% FRL); Hillsboro H S (math 52% / reading 47%, grade D, #509 of 1,632 statewide, top 34%, 604 students, 78% FRL).
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 161 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 65 units permitted in Hill County in 2024 (0 in 5+ unit buildings).
• Hill County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 3.6% in Hillsboro — 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 137 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1945 — 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 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?
• 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.