506 N Lancaster Ave

Dallas, TX 75203

$880,000D

6 bd · 4.0 ba · 3,584 sqft · Built 1945 · MultiFamily · Active · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,060/mo
• Mortgage (P&I): −$4,615
• Tax + insurance: −$1,525
• HOA: −$0
• Vac / Maint / Mgmt: −$1,273
• Net cashflow: $-1,353/mo
• Annual: $-16,231/yr
• Cap rate: 4.45%
• Cash-on-cash: -6.59%
• DSCR: 0.71
• 1% rule: 0.69%
• Cash to close: $246,400

Investor read

• This is a 2×2bd/1ba + 2×1bd/1ba units multifamily listed at $880k.
• At list price, monthly cash flow is $-1k ($-16k/yr) — negative. Per door: $-338/mo.
• To cash-flow at today's rent, offer at most $641k (27.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $606k (31.1% below list).
• It's been on market 56 days — a 3% lower offer ($854k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $606k (31.1% below list) — sets the bar for 1% rule.
• In year one you build about $94k of equity ($6k loan paydown + $88k appreciation (10.0% local appreciation)).
• Location reads 81/100 on livability (#24 in TX, #1,380 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: crime F.
• Dallas ISD (urban): math 31% / reading 36% proficiency, ranked #559 of 826 in TX (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 83% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: James Bowie El (math 37% / reading 47%, grade F, #1,335 of 4,322 statewide, top 33%, 345 students, 96% FRL); Hector P Garcia Middle (math 15% / reading 27%, grade F, #1,387 of 1,662 statewide, top 85%, 595 students, 95% FRL); W H Adamson H S (math 30% / reading 31%, grade F, #1,085 of 1,632 statewide, top 67%, 1,482 students, 96% FRL).
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-2.7%/yr); 147 active listings in the ZIP; 12,577 units permitted in Dallas County in 2024 (6,829 in 5+ unit buildings).
• Dallas County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 4y ago 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.
• By year 2, paydown + projected appreciation supports a ~$151k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.4% vs local median 2.3% in Dallas — 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 $6,060/mo this rent would consume 155% of the median local household income ($47k/yr) (locally 948% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 56 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1945 — 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.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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?