204 Lawton Ave

Hereford, TX 79045

$95,000C

3 bd · 1.0 ba · 1,296 sqft · Built — · SingleFamily · Pending · 78 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,290/mo
• Mortgage (P&I): −$498
• Tax + insurance: −$197
• HOA: −$0
• Vac / Maint / Mgmt: −$271
• Net cashflow: $325/mo
• Annual: $3,895/yr
• Cap rate: 10.39%
• Cash-on-cash: 14.64%
• DSCR: 1.65
• 1% rule: 1.36%
• Cash to close: $26,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $95k.
• At list price, monthly cash flow is $325 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $95k).
• It's been on market 78 days — a 6% lower offer ($89k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $89k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $657 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#372 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: employment C-, schools D+, amenities F.
• Hereford ISD (town): math 41% / reading 38% proficiency, ranked #434 of 826 in TX (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 106 active listings in the ZIP; 23 units permitted in Deaf Smith County in 2024 (0 in 5+ unit buildings).
• Deaf Smith County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask has dropped $15k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $27k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 78 days. Have you received any prior offers? Is the seller open to a 6% 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?
• 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.