424 E 38th St

San Angelo, TX 76903

$40,500B

2 bd · 1.0 ba · 504 sqft · Built 1954 · SingleFamily · Active · 193 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $939/mo
• Mortgage (P&I): −$212
• Tax + insurance: −$119
• HOA: −$0
• Vac / Maint / Mgmt: −$197
• Net cashflow: $411/mo
• Annual: $4,927/yr
• Cap rate: 18.46%
• Cash-on-cash: 43.44%
• DSCR: 2.93
• 1% rule: 2.32%
• Cash to close: $11,340

Investor read

• This is a 2-bed/1.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $411 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($939 rent vs $40k).
• It's been on market 193 days — a 12% lower offer ($36k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $36k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $280 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#199 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, schools F, amenities F.
• San Angelo ISD (urban): math 27% / reading 33% proficiency, ranked #627 of 826 in TX (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 3.0% of price; built in 1954 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.5%/yr); 227 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 233 units permitted in Tom Green County in 2024 (0 in 5+ unit buildings).
• Tom Green County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $11k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 18.5% vs local median 3.8% in San Angelo — 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

• It's been on market 193 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1954 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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.