809 E Palestine St

Mexia, TX 76667

$55,900B+

2 bd · 1.0 ba · 1,296 sqft · Built 1966 · SingleFamily · Active · 148 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,121/mo
• Mortgage (P&I): −$293
• Tax + insurance: −$105
• HOA: −$0
• Vac / Maint / Mgmt: −$235
• Net cashflow: $488/mo
• Annual: $5,850/yr
• Cap rate: 16.76%
• Cash-on-cash: 37.38%
• DSCR: 2.66
• 1% rule: 2.01%
• Cash to close: $15,652

Investor read

• This is a 2-bed/1.0-bath single-family listed at $56k. Condition is rated fair.
• At list price, monthly cash flow is $488 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $56k).
• It's been on market 148 days — a 12% lower offer ($49k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $49k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $386 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#458 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety B+; Watch: crime C-, amenities F, commute F.
• Mexia ISD (town): math 22% / reading 32% proficiency, ranked #696 of 826 in TX (top 84%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: A B Mcbay El (527 students, 86% FRL); Mexia J H (math 30% / reading 35%, grade F, #947 of 1,662 statewide, top 58%, 386 students, 81% FRL); Mexia H S (math 17% / reading 42%, grade F, #1,112 of 1,632 statewide, top 70%, 553 students, 77% FRL).
• Market conditions: 190 active listings in the ZIP; 17 units permitted in Limestone County in 2024 (0 in 5+ unit buildings).
• Limestone County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask has dropped $12k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $16k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wind risk, 65% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 16.8% vs local median 3.6% in Mexia — 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 148 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1966 — 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?
• 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.

Repairs flagged (vision-AI assessment)

• Major: roof — Significant wear and tear
• Major: exterior siding — Worn and weathered
• Major: hardwood flooring — Worn and in need of replacement
• Major: landscaping — Overgrown and requires trimming