405 W Elm St

Olney, TX 76374

$55,000A-

3 bd · 1.0 ba · 1,336 sqft · Built 1950 · SingleFamily · Pending · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,206/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$80
• HOA: −$0
• Vac / Maint / Mgmt: −$253
• Net cashflow: $584/mo
• Annual: $7,003/yr
• Cap rate: 19.03%
• Cash-on-cash: 45.48%
• DSCR: 3.02
• 1% rule: 2.19%
• Cash to close: $15,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $55k.
• At list price, monthly cash flow is $584 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $55k).
• It's been on market 56 days — a 3% lower offer ($53k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $53k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-2.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#557 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: health & safety C-, amenities F, commute F.
• Olney ISD (town): math 50% / reading 56% proficiency, ranked #150 of 826 in TX (top 18%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Olney El (math 27% / reading 52%, grade F, #1,545 of 4,322 statewide, top 38%, 363 students, 64% FRL); Olney J H (math 62% / reading 57%, grade B, #166 of 1,662 statewide, top 11%, 159 students, 66% FRL); Olney H S (math 67% / reading 62%, grade B-, #199 of 1,632 statewide, top 14%, 207 students, 68% FRL).
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 30 active listings in the ZIP; 5 units permitted in Young County in 2024 (0 in 5+ unit buildings).
• Young County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (-2.0% appreciation + 3.0% rent growth), your $15k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: severe 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 56 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.