Spring Cress II Plan

Waxahachie, TX 75165

$519,990D-

4 bd · 3.5 ba · 3,695 sqft · Built — · SingleFamily · Active · 825 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,467/mo
• Mortgage (P&I): −$2,877
• Tax + insurance: −$914
• HOA: −$0
• Vac / Maint / Mgmt: −$938
• Net cashflow: $-262/mo
• Annual: $-3,150/yr
• Cap rate: 5.72%
• Cash-on-cash: -2.05%
• DSCR: 0.91
• 1% rule: 0.81%
• Cash to close: $153,604

Investor read

• This is a 4-bed/3.5-bath single-family listed at $520k.
• At list price, monthly cash flow is $-262 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $511k (1.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $447k (14.1% below list).
• It's been on market 825 days — a 12% lower offer ($458k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $447k (14.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#71 in TX, #2,592 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment A-; Watch: commute F.
• Waxahachie ISD (suburban): math 45% / reading 44% proficiency, ranked #253 of 826 in TX (top 31%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Felty El (math 60% / reading 50%, grade C, #602 of 4,322 statewide, top 14%, 570 students, 34% FRL); Howard J H (math 45% / reading 41%, grade D-, #540 of 1,662 statewide, top 33%, 758 students, 49% FRL); Waxahachie H S (math 38% / reading 46%, grade F, #730 of 1,632 statewide, top 47%, 2,963 students, 45% FRL) — zoned schools at 43% FRL track the district average.
• Market conditions: Rents rising (+3.4%/yr); 865 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 3,016 units permitted in Ellis County in 2024 (20 in 5+ unit buildings).
• Ellis County population projected at +36% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Cap rate 5.7% vs local median 3.3% in Waxahachie — 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.
• At $4,467/mo this rent would consume 62% of the median local household income ($86k/yr) (locally 1365% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 825 days. Have you received any prior offers? Is the seller open to a 14% 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 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?
• 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.