289 Heatherwood Dr

Dripping Springs, TX 78619

$369,900D

3 bd · 2.0 ba · 1,562 sqft · Built 2006 · MultiFamily · Active · 47 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,694/mo
• Mortgage (P&I): −$1,940
• Tax + insurance: −$616
• HOA: −$120
• Vac / Maint / Mgmt: −$566
• Net cashflow: $-548/mo
• Annual: $-6,575/yr
• Cap rate: 4.52%
• Cash-on-cash: -6.35%
• DSCR: 0.72
• 1% rule: 0.73%
• Cash to close: $103,572

Investor read

• This is a 3-bed/2.0-bath multifamily listed at $370k. Condition is rated good.
• At list price, monthly cash flow is $-548 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $291k (21.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $269k (27.2% below list).
• It's been on market 47 days — a 3% lower offer ($359k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $269k (27.2% 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 $11k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#149 in TX, #4,158 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: cost of living D, amenities F, commute F.
• Dripping Springs ISD (rural): math 55% / reading 61% proficiency, ranked #41 of 826 in TX (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 16% free/reduced lunch — higher-income household profile.
• Zoned schools: Walnut Springs El (math 51% / reading 58%, grade C, #621 of 4,322 statewide, top 15%, 887 students, 13% FRL); Dripping Springs Middle (math 52% / reading 53%, grade C+, #293 of 1,662 statewide, top 18%, 882 students, 0% FRL); Dripping Springs H S (math 45% / reading 76%, grade C+, #268 of 1,632 statewide, top 17%, 2,433 students, 0% FRL).
• Market conditions: 140 active listings in the ZIP; 5,270 units permitted in Hays County in 2024 (1,464 in 5+ unit buildings).
• Hays County population projected at +93% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask is 14726% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Climate carrying-cost: major wind risk, 78% chance of damaging wind over 30y; 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 4.5% vs local median 2.1% in Dripping Springs — 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

• 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 47 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.