503 Northern Red Dr

Nevada, TX 75173

$277,490D

4 bd · 2.0 ba · 1,916 sqft · Built 2026 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,981/mo
• Mortgage (P&I): −$1,455
• Tax + insurance: −$529
• HOA: −$46
• Vac / Maint / Mgmt: −$416
• Net cashflow: $-465/mo
• Annual: $-5,581/yr
• Cap rate: 4.57%
• Cash-on-cash: -6.16%
• DSCR: 0.73
• 1% rule: 0.71%
• Cash to close: $77,697

Investor read

• This is a 4-bed/2.0-bath single-family listed at $277k. Condition is rated excellent.
• At list price, monthly cash flow is $-465 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $210k (24.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $198k (28.6% below list).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $198k (28.6% below list) — sets the bar for 1% rule.
• In year one you build about $30k of equity ($2k loan paydown + $28k appreciation (10.0% local appreciation)).
• Location reads 63/100 on livability (#881 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A; Watch: amenities F, commute F, health & safety F.
• Community ISD (rural): math 30% / reading 38% proficiency, ranked #479 of 826 in TX (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Leland E Edge Middle (math 25% / reading 35%, grade F, #1,056 of 1,662 statewide, top 65%, 931 students, 53% FRL) — zoned schools average 53% FRL vs 36% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 421 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 19,194 units permitted in Collin County in 2024 (3,988 in 5+ unit buildings).
• Collin County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$48k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; major wind risk, 27% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.6% vs local median 1.9% in Nevada — 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.

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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.