540 W Hempstead St

Giddings, TX 78942

$79,500B-

2 bd · 1.0 ba · 1,025 sqft · Built 1944 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,800/mo
• Mortgage (P&I): −$417
• Tax + insurance: −$118
• HOA: −$0
• Vac / Maint / Mgmt: −$378
• Net cashflow: $887/mo
• Annual: $10,640/yr
• Cap rate: 19.68%
• Cash-on-cash: 47.80%
• DSCR: 3.13
• 1% rule: 2.26%
• Cash to close: $22,260

Investor read

• This is a 2-bed/1.0-bath single-family listed at $80k.
• At list price, monthly cash flow is $887 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $80k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $550 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#751 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: amenities F, commute F, employment D-.
• Giddings ISD (rural): math 45% / reading 45% proficiency, ranked #270 of 826 in TX (top 33%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Giddings El (math 27% / reading 27%, grade F, #2,791 of 4,322 statewide, top 68%, 574 students, 72% FRL); Giddings Middle (math 41% / reading 45%, grade D-, #540 of 1,662 statewide, top 33%, 455 students, 57% FRL); Giddings H S (math 77% / reading 62%, grade B, #119 of 1,632 statewide, top 9%, 653 students, 46% FRL) — zoned schools at 58% FRL track the district average.
• Watch-outs: built in 1944 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 92 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 18 units permitted in Lee County in 2024 (0 in 5+ unit buildings).
• 3 sale attempts 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 90% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 19.7% vs local median 3.4% in Giddings — 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

• Built in 1944 — 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?
• 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.