5111 W Illinois Ave

Midland, TX 79703

$450,000D

5 bd · 4.0 ba · 2,401 sqft · Built 1981 · MultiFamily · Pending · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,765/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$536
• HOA: −$0
• Vac / Maint / Mgmt: −$791
• Net cashflow: $78/mo
• Annual: $940/yr
• Cap rate: 6.50%
• Cash-on-cash: 0.75%
• DSCR: 1.03
• 1% rule: 0.84%
• Cash to close: $126,000

Investor read

• This is a 5-bed/4.0-bath multifamily listed at $450k.
• At list price, monthly cash flow is $78 ($940/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $376k (16.3% below list).
• It's been on market 19 days — a 2% lower offer ($443k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $376k (16.3% 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 $14k 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: Jones El (math 22% / reading 27%, grade F, #3,052 of 4,322 statewide, top 74%, 448 students, 69% FRL); Alamo J H (math 23% / reading 32%, grade F, #1,156 of 1,662 statewide, top 71%, 865 students, 62% FRL); Midland H S (math 37% / reading 7%, grade F, #1,366 of 1,632 statewide, top 84%, 2,492 students, 44% FRL).
• Market conditions: Rents soft (-0.3%/yr); 64 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% 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 $3,765/mo this rent would consume 58% of the median local household income ($77k/yr) (locally 417% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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.
• 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.