604 S Spears St

Alvarado, TX 76009

$199,900D

3 bd · 1.0 ba · 1,224 sqft · Built 1952 · SingleFamily · Active · 145 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,802/mo
• Mortgage (P&I): −$1,048
• Tax + insurance: −$426
• HOA: −$0
• Vac / Maint / Mgmt: −$378
• Net cashflow: $-52/mo
• Annual: $-618/yr
• Cap rate: 5.98%
• Cash-on-cash: -1.10%
• DSCR: 0.95
• 1% rule: 0.90%
• Cash to close: $55,972

Investor read

• This is a 3-bed/1.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-52 ($-618/yr) — negative.
• To cash-flow at today's rent, offer at most $191k (4.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $180k (9.9% below list).
• It's been on market 145 days — a 12% lower offer ($176k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $176k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#228 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools D-, amenities F, commute F.
• Alvarado ISD (rural): math 41% / reading 37% proficiency, ranked #416 of 826 in TX (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 359 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 2,152 units permitted in Johnson County in 2024 (76 in 5+ unit buildings).
• Johnson County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $20k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• 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 6.0% vs local median 3.9% in Alvarado — 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 145 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1952 — 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 D-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.