The Waterloo (175) Plan

Kyle, TX 78640

$224,990F

3 bd · 2.5 ba · 1,755 sqft · Built — · SingleFamily · Active · 171 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,032/mo
• Mortgage (P&I): −$1,710
• Tax + insurance: −$544
• HOA: −$0
• Vac / Maint / Mgmt: −$427
• Net cashflow: $-648/mo
• Annual: $-7,780/yr
• Cap rate: 3.91%
• Cash-on-cash: -8.52%
• DSCR: 0.62
• 1% rule: 0.62%
• Cash to close: $91,309

Investor read

• This is a 3-bed/2.5-bath single-family listed at $225k. Condition is rated good.
• At list price, monthly cash flow is $-648 ($-8k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $203k (9.7% below list).
• It's been on market 171 days — a 12% lower offer ($198k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $198k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#138 in TX, #3,993 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, employment A; Watch: amenities F, commute F.
• Hays CISD (rural): math 35% / reading 41% proficiency, ranked #390 of 826 in TX (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Blanco Vista El (math 33% / reading 42%, grade F, #1,744 of 4,322 statewide, top 41%, 731 students, 58% FRL); Laura B Wallace Middle (math 31% / reading 34%, grade F, #947 of 1,662 statewide, top 58%, 789 students, 53% FRL); Lehman H S (math 20% / reading 32%, grade F, #1,234 of 1,632 statewide, top 76%, 2,120 students, 59% FRL).
• Market conditions: Rents soft (-0.3%/yr); 2089 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 54d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 72% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.

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 171 days. Have you received any prior offers? Is the seller open to a 12% 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.
• 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.
• 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.