1401 Brook Meadow Cir

Lancaster, TX 75134

$410,000D

4 bd · 5.0 ba · 2,310 sqft · Built 1985 · MultiFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,785/mo
• Mortgage (P&I): −$2,150
• Tax + insurance: −$749
• HOA: −$0
• Vac / Maint / Mgmt: −$795
• Net cashflow: $91/mo
• Annual: $1,087/yr
• Cap rate: 6.56%
• Cash-on-cash: 0.95%
• DSCR: 1.04
• 1% rule: 0.92%
• Cash to close: $114,800

Investor read

• This is a 2 × 2-bed/2.5-bath units multifamily listed at $410k.
• At list price, monthly cash flow is $91 ($1k/yr) — positive. Per door: $45/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $378k (7.7% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $378k (7.7% below list) — sets the bar for 1% rule.
• 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 62/100 on livability (#926 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, crime F, amenities F.
• Lancaster ISD (suburban): math 19% / reading 29% proficiency, ranked #714 of 826 in TX (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Houston El (math 25% / reading 32%, grade F, #2,706 of 4,322 statewide, top 63%, 674 students, 89% FRL); Lancaster Middle (math 20% / reading 32%, grade F, #1,222 of 1,662 statewide, top 74%, 1,007 students, 84% FRL); Lancaster H S (math 14% / reading 34%, grade F, #1,333 of 1,632 statewide, top 82%, 2,250 students, 84% FRL).
• Market conditions: Rents flat; 102 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); 12,577 units permitted in Dallas County in 2024 (6,829 in 5+ unit buildings).
• Dallas County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 19y 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.
• Current owner paid $104k; list at $410k implies a 294% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 4.8% in Lancaster — 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 $3,785/mo this rent would consume 65% of the median local household income ($70k/yr) (locally 399% 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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.