Red Oak II Plan

Heartland, TX 75114

$236,999F

3 bd · 2.0 ba · 1,440 sqft · Built — · SingleFamily · Active · 1027 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,034/mo
• Mortgage (P&I): −$1,398
• Tax + insurance: −$444
• HOA: −$0
• Vac / Maint / Mgmt: −$427
• Net cashflow: $-236/mo
• Annual: $-2,826/yr
• Cap rate: 5.23%
• Cash-on-cash: -3.79%
• DSCR: 0.83
• 1% rule: 0.76%
• Cash to close: $74,641

Investor read

• This is a 3-bed/2.0-bath single-family listed at $237k. Condition is rated excellent.
• At list price, monthly cash flow is $-236 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $232k (1.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $203k (14.2% below list).
• It's been on market 1027 days — a 12% lower offer ($209k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $203k (14.2% below list) — sets the bar for 1% rule.
• 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: area grade F — affects rentability + tenant quality, not the cash-flow math above.
• Crandall ISD (rural): math 36% / reading 42% proficiency, ranked #351 of 826 in TX (top 42%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: W A Martin El (math 41% / reading 32%, grade F, #1,883 of 4,322 statewide, top 44%, 644 students, 71% FRL); Crandall Middle (math 38% / reading 42%, grade F, #646 of 1,662 statewide, top 40%, 983 students, 60% FRL); Crandall H S (math 33% / reading 53%, grade F, #713 of 1,632 statewide, top 44%, 1,707 students, 56% FRL) — zoned schools average 62% FRL vs 41% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 1365 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 126d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 82% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,747 units permitted in Kaufman County in 2024 (180 in 5+ unit buildings).
• Kaufman County population projected at +43% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.

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 1027 days. Have you received any prior offers? Is the seller open to a 14% 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.
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.