606 Leota St

Longview, TX 75601

$139,900D

3 bd · 1.0 ba · 1,222 sqft · Built 1961 · SingleFamily · Pending · 94 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,227/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$258
• HOA: −$0
• Vac / Maint / Mgmt: −$258
• Net cashflow: $-22/mo
• Annual: $-268/yr
• Cap rate: 6.10%
• Cash-on-cash: -0.68%
• DSCR: 0.97
• 1% rule: 0.88%
• Cash to close: $39,172

Investor read

• This is a 3-bed/1.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $-22 ($-268/yr) — negative.
• To cash-flow at today's rent, offer at most $136k (2.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $123k (12.3% below list).
• It's been on market 94 days — a 9% lower offer ($127k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (12.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $967 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#213 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, crime D+, amenities F.
• Longview ISD (urban): math 49% / reading 46% proficiency, ranked #244 of 826 in TX (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: J L Everhart Magnet El (math 55% / reading 50%, grade C-, #720 of 4,322 statewide, top 17%, 449 students, 90% FRL, charter); Forest Park Magnet School (math 42% / reading 40%, grade F, #613 of 1,662 statewide, top 38%, 453 students, 96% FRL, charter); Longview H S (math 61% / reading 52%, grade C, #357 of 1,632 statewide, top 22%, 2,170 students, 82% FRL, charter) — zoned schools average 89% FRL vs 66% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.3%/yr); 155 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); 193 units permitted in Gregg County in 2024 (0 in 5+ unit buildings).
• Climate carrying-cost: major wind risk, 57% 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 6.1% vs local median 3.0% in Longview — 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

• 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 94 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1961 — 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?
• 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?