407 Baker St

Lindale, TX 75771

$163,200C+

3 bd · 2.0 ba · 2,054 sqft · Built 1938 · SingleFamily · Active · 64 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,871/mo
• Mortgage (P&I): −$856
• Tax + insurance: −$435
• HOA: −$0
• Vac / Maint / Mgmt: −$393
• Net cashflow: $188/mo
• Annual: $2,252/yr
• Cap rate: 7.67%
• Cash-on-cash: 4.93%
• DSCR: 1.22
• 1% rule: 1.15%
• Cash to close: $45,696

Investor read

• This is a 3-bed/2.0-bath single-family listed at $163k.
• At list price, monthly cash flow is $188 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $163k).
• It's been on market 64 days — a 6% lower offer ($153k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $153k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#52 in TX, #2,100 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Lindale ISD (town): math 71% / reading 66% proficiency, ranked #20 of 826 in TX (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 2.7% of price; built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 633 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 595 units permitted in Smith County in 2024 (45 in 5+ unit buildings).
• Smith County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 4y ago; this cycle's ask has dropped $41k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 52% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 3.2% in Lindale — 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 64 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1938 — 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.
• 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.