3634 Shirley

Orange, TX 77632

$40,000B-

1 bd · 1.0 ba · 400 sqft · Built — · SingleFamily · Active · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $870/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$67
• HOA: −$0
• Vac / Maint / Mgmt: −$183
• Net cashflow: $411/mo
• Annual: $4,935/yr
• Cap rate: 18.63%
• Cash-on-cash: 44.06%
• DSCR: 2.96
• 1% rule: 2.18%
• Cash to close: $11,200

Investor read

• This is a 1-bed/1.0-bath single-family listed at $40k. Condition is rated poor.
• At list price, monthly cash flow is $411 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($870 rent vs $40k).
• It's been on market 56 days — a 3% lower offer ($39k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $39k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $277 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#286 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D+, employment D+, schools D-.
• Little Cypress-Mauriceville CISD (rural): math 35% / reading 40% proficiency, ranked #435 of 826 in TX (top 53%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 294 active listings in the ZIP; 235 units permitted in Orange County in 2024 (50 in 5+ unit buildings).
• Orange County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 18.6% vs local median 3.9% in Orange — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• This rent is only 14% of the median local income ($74k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.

Repairs flagged (vision-AI assessment)

• Major: House demolition — The house needs to be torn down as per the listing remarks.
• Major: Site preparation — The site needs to be cleared and leveled for a new construction project.
• Major: Foundation repair — The foundation may need repair or replacement due to the poor condition of the exterior.
• Major: Structural repairs — The structure may need significant repairs or replacement due to the poor condition of the exterior.
• Major: Roof replacement — The roof is likely in poor condition and needs to be replaced.
• Major: Interior repairs — The interior is likely in poor condition and needs to be completely renovated.