Highgate Plan

San Marcos, TX 78666

$212,999D-

4 bd · 2.5 ba · 1,802 sqft · Built — · SingleFamily · Active · 125 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,050/mo
• Mortgage (P&I): −$1,280
• Tax + insurance: −$407
• HOA: −$0
• Vac / Maint / Mgmt: −$430
• Net cashflow: $-67/mo
• Annual: $-800/yr
• Cap rate: 5.96%
• Cash-on-cash: -1.17%
• DSCR: 0.95
• 1% rule: 0.84%
• Cash to close: $68,318

Investor read

• This is a 4-bed/2.5-bath single-family listed at $213k. Condition is rated good.
• At list price, monthly cash flow is $-67 ($-800/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $205k (3.8% below list).
• It's been on market 125 days — a 12% lower offer ($187k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $187k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#30 in TX, #1,601 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, health & safety A+; Watch: crime D+, schools F, employment F.
• San Marcos CISD (rural): math 18% / reading 31% proficiency, ranked #731 of 826 in TX (top 88%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+2.0%/yr); 1145 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 5,270 units permitted in Hays County in 2024 (1,464 in 5+ unit buildings).
• Hays County population projected at +93% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 6→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 3.2% in San Marcos — 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 45% of the median local income ($55k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 125 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• Crime grade is D 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?
• 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.