1245 Rainbow Ln

Vidor, TX 77662

$22,000D

1 bd · 1.0 ba · 936 sqft · Built 1948 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,003/mo
• Mortgage (P&I): −$115
• Tax + insurance: −$37
• HOA: −$0
• Vac / Maint / Mgmt: −$211
• Net cashflow: $640/mo
• Annual: $7,680/yr
• Cap rate: 41.20%
• Cash-on-cash: 124.67%
• DSCR: 6.55
• 1% rule: 4.56%
• Cash to close: $6,160

Investor read

• This is a 1-bed/1.0-bath single-family listed at $22k.
• At list price, monthly cash flow is $640 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $22k).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $152 of loan paydown is wiped out by about $660 of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#576 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B; Watch: amenities F, commute F.
• Vidor ISD (suburban): math 41% / reading 39% proficiency, ranked #422 of 826 in TX (top 51%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Vidor H S (math 56% / reading 40%, grade D, #571 of 1,632 statewide, top 36%, 1,193 students, 50% FRL) — zoned schools at 50% FRL track the district average.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 242 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 235 units permitted in Orange County in 2024 (50 in 5+ unit buildings).
• Orange County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 5y ago; this cycle's ask is 47% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• 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: severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 41.2% vs local median 4.6% in Vidor — 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 is only 17% of the median local income ($72k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• Built in 1948 — 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.