406 Millspaugh St

San Angelo, TX 76901

$189,000C-

4 bd · 2.0 ba · 1,680 sqft · Built 1987 · SingleFamily · Active · 78 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,804/mo
• Mortgage (P&I): −$991
• Tax + insurance: −$511
• HOA: −$0
• Vac / Maint / Mgmt: −$379
• Net cashflow: $-77/mo
• Annual: $-927/yr
• Cap rate: 5.80%
• Cash-on-cash: -1.75%
• DSCR: 0.92
• 1% rule: 0.95%
• Cash to close: $52,920

Investor read

• This is a 4-bed/2.0-bath single-family listed at $189k.
• At list price, monthly cash flow is $-77 ($-927/yr) — negative.
• To cash-flow at today's rent, offer at most $175k (7.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $180k (4.6% below list).
• It's been on market 78 days — a 6% lower offer ($178k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $175k (7.2% below list) — sets the bar for cash-flow.
• In year one you build about $20k of equity ($1k loan paydown + $19k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#199 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, schools F, amenities F.
• San Angelo ISD (urban): math 27% / reading 33% proficiency, ranked #627 of 826 in TX (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 2.7% of price.
• Market conditions: Rents rising fast (+5.8%/yr); 331 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 63% of comp listings sitting > 30 days — soft ceiling on asking rent; 233 units permitted in Tom Green County in 2024 (0 in 5+ unit buildings).
• Tom Green County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 18y 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 (10.0% appreciation + 5.8% rent growth), your $53k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% vs local median 3.8% in San Angelo — 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.
• This rent runs 31% of the median local income ($69k/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 78 days. Have you received any prior offers? Is the seller open to a 7% concession, seller financing, or rate buy-down credit?
• 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?
• 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.