111 S Mill St

Flatonia, TX 78941

$179,000C-

2 bd · 1.0 ba · 1,348 sqft · Built 1930 · SingleFamily · Pending · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,400/mo
• Mortgage (P&I): −$939
• Tax + insurance: −$241
• HOA: −$0
• Vac / Maint / Mgmt: −$294
• Net cashflow: $-73/mo
• Annual: $-879/yr
• Cap rate: 5.80%
• Cash-on-cash: -1.75%
• DSCR: 0.92
• 1% rule: 0.78%
• Cash to close: $50,120

Investor read

• This is a 2-bed/1.0-bath single-family listed at $179k.
• At list price, monthly cash flow is $-73 ($-879/yr) — negative.
• To cash-flow at today's rent, offer at most $166k (7.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $140k (21.8% below list).
• It's been on market 87 days — a 6% lower offer ($168k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $140k (21.8% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($1k loan paydown + $5k appreciation (2.8% local appreciation)).
• Location reads 66/100 on livability (#599 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment B+; Watch: schools D+, amenities F, commute F.
• Flatonia ISD (rural): math 69% / reading 60% proficiency, ranked #43 of 826 in TX (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 79 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 23 units permitted in Fayette County in 2024 (0 in 5+ unit buildings).
• Fayette County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 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.
• Current owner paid $40k; list at $179k implies a 348% gain — meaningful room to come down on a strong offer.
• At projected returns (2.8% appreciation + 3.0% rent growth), your $50k cash investment doubles in ~7 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% vs local median 2.7% in Flatonia — 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?
• It's been on market 87 days. Have you received any prior offers? Is the seller open to a 22% concession, seller financing, or rate buy-down credit?
• Built in 1930 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• 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.