819/821 Sagewood Trl

San Marcos, TX 78666

$399,000D

6 bd · 7.0 ba · 2,522 sqft · Built 1998 · MultiFamily · Pending · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,376/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$665
• HOA: −$0
• Vac / Maint / Mgmt: −$709
• Net cashflow: $-90/mo
• Annual: $-1,084/yr
• Cap rate: 6.02%
• Cash-on-cash: -0.97%
• DSCR: 0.96
• 1% rule: 0.85%
• Cash to close: $111,720

Investor read

• This is a 2 × 3.0-bed/3.5-bath units multifamily listed at $399k. Condition is rated fair.
• At list price, monthly cash flow is $-90 ($-1k/yr) — negative. Per door: $-45/mo.
• To cash-flow at today's rent, offer at most $386k (3.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $338k (15.4% below list).
• It's been on market 56 days — a 3% lower offer ($387k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $338k (15.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k 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+, 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.
• Zoned schools: Crockett El (math 27% / reading 43%, grade F, #1,965 of 4,322 statewide, top 46%, 525 students, 68% FRL); Miller Middle (math 21% / reading 36%, grade F, #1,122 of 1,662 statewide, top 69%, 986 students, 74% FRL); San Marcos H S (math 26% / reading 31%, grade F, #1,157 of 1,632 statewide, top 72%, 2,536 students, 76% FRL).
• Market conditions: Rents rising (+2.0%/yr); 1146 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• 4 sale attempts since 28y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→21/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.
• At $3,376/mo this rent would consume 74% of the median local household income ($55k/yr) (locally 6504% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 56 days. Have you received any prior offers? Is the seller open to a 15% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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?

Repairs flagged (vision-AI assessment)

• Moderate: kitchen cabinets — dated and in need of replacement
• Moderate: bathroom fixtures — outdated and in need of replacement
• Minor: exterior siding — moderate wear, could benefit from touch-up paint