1831 Azalea Dr

Melissa, TX 75454

$329,900D-

5 bd · 3.5 ba · 1,654 sqft · Built 2025 · Other · Pending · 199 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,594/mo
• Mortgage (P&I): −$1,730
• Tax + insurance: −$267
• HOA: −$280
• Vac / Maint / Mgmt: −$545
• Net cashflow: $-227/mo
• Annual: $-2,727/yr
• Cap rate: 5.47%
• Cash-on-cash: -2.95%
• DSCR: 0.87
• 1% rule: 0.79%
• Cash to close: $92,372

Investor read

• This is a 5-bed/3.5-bath other listed at $330k.
• At list price, monthly cash flow is $-227 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $290k (12.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $259k (21.4% below list).
• It's been on market 199 days — a 12% lower offer ($290k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $259k (21.4% below list) — sets the bar for 1% rule.
• 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 68/100 on livability (#477 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: cost of living D, amenities F, commute F.
• Melissa ISD (suburban): math 65% / reading 65% proficiency, ranked #24 of 826 in TX (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Willow Wood El (930 students, 20% FRL) — zoned schools at 20% FRL track the district average.
• Market conditions: Rents soft (-1.4%/yr); 503 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 43% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 19,194 units permitted in Collin County in 2024 (3,988 in 5+ unit buildings).
• Collin County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $40k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.5% vs local median 2.8% in Melissa — 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.

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 199 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 A-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.