631 Coleman St

Stephenville, TX 76401

$295,000D

4 bd · 2.0 ba · 1,624 sqft · Built 2010 · MultiFamily · Pending · 179 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,562/mo
• Mortgage (P&I): −$1,547
• Tax + insurance: −$492
• HOA: −$0
• Vac / Maint / Mgmt: −$538
• Net cashflow: $-15/mo
• Annual: $-176/yr
• Cap rate: 6.23%
• Cash-on-cash: -0.21%
• DSCR: 0.99
• 1% rule: 0.87%
• Cash to close: $82,600

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $295k.
• At list price, monthly cash flow is $-15 ($-176/yr) — negative. Per door: $-7/mo.
• To cash-flow at today's rent, offer at most $293k (0.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $256k (13.2% below list).
• It's been on market 179 days — a 12% lower offer ($260k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $256k (13.2% 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 $9k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#124 in TX, #3,840 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F, employment D-.
• Stephenville ISD (town): math 53% / reading 48% proficiency, ranked #191 of 826 in TX (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Central El (422 students, 64% FRL); Henderson J H (math 60% / reading 50%, grade B-, #248 of 1,662 statewide, top 15%, 551 students, 48% FRL); Stephenville H S (math 45% / reading 56%, grade D+, #492 of 1,632 statewide, top 30%, 1,127 students, 45% FRL).
• Market conditions: Rents flat; 384 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 110 units permitted in Erath County in 2024 (61 in 5+ unit buildings).
• Erath County population projected at +55% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $45k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 2.2% in Stephenville — 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 $2,562/mo this rent would consume 50% of the median local household income ($61k/yr) (locally 1758% 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 179 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• 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?
• 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.
• 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.