2400 College Ave

Midland, TX 79701

$400,000C

16 bd · 16.0 ba · 2,470 sqft · Built 1948 · MultiFamily · Active · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,415/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$497
• HOA: −$0
• Vac / Maint / Mgmt: −$927
• Net cashflow: $893/mo
• Annual: $10,717/yr
• Cap rate: 8.97%
• Cash-on-cash: 9.57%
• DSCR: 1.43
• 1% rule: 1.10%
• Cash to close: $112,000

Investor read

• This is a 4 × 1-bed/1-bath units multifamily listed at $400k.
• At list price, monthly cash flow is $893 ($11k/yr) — positive. Per door: $223/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $400k).
• It's been on market 29 days — a 2% lower offer ($394k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $394k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#57 in TX, #2,192 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety A+; Watch: crime C-, commute D+, amenities D.
• Midland ISD (urban): math 34% / reading 36% proficiency, ranked #477 of 826 in TX (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: San Jacinto J H (math 26% / reading 35%, grade F, #1,036 of 1,662 statewide, top 63%, 829 students, 54% FRL); Midland H S (math 37% / reading 7%, grade F, #1,366 of 1,632 statewide, top 84%, 2,492 students, 44% FRL) — zoned schools at 49% FRL track the district average.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 113 active listings in the ZIP; 1,504 units permitted in Midland County in 2024 (0 in 5+ unit buildings).
• Midland County population projected at +83% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 8y 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.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.0% vs local median 4.7% in Midland — 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 $4,415/mo this rent would consume 92% of the median local household income ($57k/yr) (locally 938% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1948 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.