505 E Houston St

Marshall, TX 75670

$22,500D

2 bd · 1.0 ba · 1,656 sqft · Built 1930 · SingleFamily · Active · 118 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,195/mo
• Mortgage (P&I): −$118
• Tax + insurance: −$17
• HOA: −$0
• Vac / Maint / Mgmt: −$251
• Net cashflow: $809/mo
• Annual: $9,708/yr
• Cap rate: 49.44%
• Cash-on-cash: 154.10%
• DSCR: 7.86
• 1% rule: 5.31%
• Cash to close: $6,300

Investor read

• This is a 2-bed/1.0-bath single-family listed at $22k.
• At list price, monthly cash flow is $809 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $22k).
• It's been on market 118 days — a 9% lower offer ($20k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $20k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $156 of loan paydown is wiped out by about $675 of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#451 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: amenities F, commute F, employment F.
• Marshall ISD (town): math 29% / reading 29% proficiency, ranked #658 of 826 in TX (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Marshall J H (math 30% / reading 27%, grade F, #1,122 of 1,662 statewide, top 69%, 1,105 students, 76% FRL).
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 144 active listings in the ZIP; 1 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 85 units permitted in Harrison County in 2024 (15 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $6k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 57% 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 49.4% vs local median 4.5% in Marshall — 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.
• This rent runs 34% of the median local income ($42k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 118 days. Have you received any prior offers? Is the seller open to a 9% 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 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?
• 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.