407 Johnson St

McGregor, TX 76657

$149,000D+

2 bd · 1.0 ba · 800 sqft · Built 1950 · SingleFamily · Pending · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,339/mo
• Mortgage (P&I): −$781
• Tax + insurance: −$190
• HOA: −$0
• Vac / Maint / Mgmt: −$281
• Net cashflow: $87/mo
• Annual: $1,041/yr
• Cap rate: 6.99%
• Cash-on-cash: 2.50%
• DSCR: 1.11
• 1% rule: 0.90%
• Cash to close: $41,720

Investor read

• This is a 2-bed/1.0-bath single-family listed at $149k.
• At list price, monthly cash flow is $87 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $134k (10.1% below list).
• It's been on market 17 days — a 2% lower offer ($147k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $134k (10.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#310 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, employment C-, commute D+.
• Mcgregor ISD (town): math 37% / reading 42% proficiency, ranked #429 of 826 in TX (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 64% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Mcgregor El (math 33% / reading 43%, grade F, #1,709 of 4,322 statewide, top 40%, 454 students, 67% FRL) — zoned schools at 67% FRL track the district average.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 157 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 1,014 units permitted in McLennan County in 2024 (200 in 5+ unit buildings).
• McLennan County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 71% 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 7.0% vs local median 3.4% in McGregor — 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 1950 — 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 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?
• 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.
• 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.