604 E Morton St

Denison, TX 75021

$132,000C+

3 bd · 1.0 ba · 1,288 sqft · Built 1900 · SingleFamily · Pending · 164 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,535/mo
• Mortgage (P&I): −$692
• Tax + insurance: −$287
• HOA: −$0
• Vac / Maint / Mgmt: −$322
• Net cashflow: $234/mo
• Annual: $2,805/yr
• Cap rate: 8.42%
• Cash-on-cash: 7.59%
• DSCR: 1.34
• 1% rule: 1.16%
• Cash to close: $36,960

Investor read

• This is a 3-bed/1.0-bath single-family listed at $132k.
• At list price, monthly cash flow is $234 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $132k).
• It's been on market 164 days — a 12% lower offer ($116k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $116k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $913 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#221 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: health & safety D+, amenities F, commute F.
• Denison ISD (urban): math 43% / reading 44% proficiency, ranked #315 of 826 in TX (top 38%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Terrell El (math 52% / reading 47%, grade D, #865 of 4,322 statewide, top 21%, 350 students, 76% FRL); Henry Scott Middle (math 36% / reading 48%, grade D-, #572 of 1,662 statewide, top 36%, 749 students, 66% FRL); Denison H S (math 53% / reading 53%, grade C-, #437 of 1,632 statewide, top 27%, 1,310 students, 58% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 168 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 70% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 2,272 units permitted in Grayson County in 2024 (750 in 5+ unit buildings).
• Grayson County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $28k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 3.9% in Denison — 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 164 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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 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?
• 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.