402 Cottonwood Dr

Harker Heights, TX 76548

$230,000D-

4 bd · 2.0 ba · 1,992 sqft · Built 1976 · SingleFamily · Active · 615 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,798/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$521
• HOA: −$0
• Vac / Maint / Mgmt: −$378
• Net cashflow: $-306/mo
• Annual: $-3,674/yr
• Cap rate: 4.70%
• Cash-on-cash: -5.71%
• DSCR: 0.75
• 1% rule: 0.78%
• Cash to close: $64,400

Investor read

• This is a 4-bed/2.0-bath single-family listed at $230k.
• At list price, monthly cash flow is $-306 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $176k (23.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $180k (21.8% below list).
• It's been on market 615 days — a 12% lower offer ($202k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $176k (23.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#61 in TX, #2,271 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Killeen ISD (urban): math 31% / reading 38% proficiency, ranked #524 of 826 in TX (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Harker Heights El (math 37% / reading 32%, grade F, #1,995 of 4,322 statewide, top 50%, 724 students, 85% FRL); Eastern Hills Middle (math 26% / reading 32%, grade F, #1,103 of 1,662 statewide, top 67%, 610 students, 72% FRL); Harker Heights H S (math 29% / reading 60%, grade F, #652 of 1,632 statewide, top 43%, 2,359 students, 34% FRL) — zoned schools average 64% FRL vs 47% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 272 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 3,222 units permitted in Bell County in 2024 (246 in 5+ unit buildings).
• Bell County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 13 sale attempts since 20y ago; this cycle's ask has dropped $70k (23%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $107k; list at $230k implies a 114% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 62% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.7% vs local median 3.8% in Harker Heights — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 615 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• Built in 1976 — 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.
• 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.