2902 Cactus Dr

Big Spring, TX 79720

$197,000D-

3 bd · 2.0 ba · 1,744 sqft · Built 1970 · SingleFamily · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,397/mo
• Mortgage (P&I): −$1,033
• Tax + insurance: −$368
• HOA: −$0
• Vac / Maint / Mgmt: −$293
• Net cashflow: $-298/mo
• Annual: $-3,570/yr
• Cap rate: 4.48%
• Cash-on-cash: -6.47%
• DSCR: 0.71
• 1% rule: 0.71%
• Cash to close: $55,160

Investor read

• This is a 3-bed/2.0-bath single-family listed at $197k.
• At list price, monthly cash flow is $-298 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (26.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $140k (29.1% below list).
• It's been on market 15 days — a 2% lower offer ($194k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $140k (29.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#948 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, crime F, amenities F.
• Big Spring ISD (town): math 29% / reading 30% proficiency, ranked #641 of 826 in TX (top 78%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Big Spring J H (math 25% / reading 34%, grade F, #1,077 of 1,662 statewide, top 66%, 516 students, 70% FRL); Big Spring H S (math 23% / reading 30%, grade F, #1,228 of 1,632 statewide, top 76%, 1,084 students, 67% FRL).
• Market conditions: 266 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 69 units permitted in Howard County in 2024 (5 in 5+ unit buildings).
• Howard County population projected at +42% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 6→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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?
• Built in 1970 — 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.
• Schools are F-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 F 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?
• 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.