LEXINGTON Plan

Pattison, TX 77423

$249,990F

4 bd · 2.5 ba · 1,785 sqft · Built — · SingleFamily · Active · 67 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,340/mo
• Mortgage (P&I): −$2,151
• Tax + insurance: −$684
• HOA: −$0
• Vac / Maint / Mgmt: −$491
• Net cashflow: $-986/mo
• Annual: $-11,830/yr
• Cap rate: 3.41%
• Cash-on-cash: -10.30%
• DSCR: 0.54
• 1% rule: 0.57%
• Cash to close: $114,850

Investor read

• This is a 4-bed/2.5-bath single-family listed at $250k. Condition is rated good.
• At list price, monthly cash flow is $-986 ($-12k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $234k (6.4% below list).
• It's been on market 67 days — a 6% lower offer ($235k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $234k (6.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#876 in TX) — a middle-class / working-renter tenant base. Strengths: housing A+, crime A, cost of living A; Watch: schools F, amenities F, commute F.
• Royal ISD (rural): math 23% / reading 23% proficiency, ranked #744 of 826 in TX (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents soft (-1.0%/yr); 1014 active listings in the ZIP; solid renter incomes; 483 units permitted in Waller County in 2024 (89 in 5+ unit buildings).
• Waller County population projected at +62% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; moderate 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 3.4% vs local median 4.4% in Pattison — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 33% of the median local income ($84k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• It's been on market 67 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• 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.