1004 E Colorado

Pearsall, TX 78061

$140,000C

3 bd · 2.0 ba · 1,337 sqft · Built 1992 · SingleFamily · Active · 223 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,276/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$242
• HOA: −$0
• Vac / Maint / Mgmt: −$268
• Net cashflow: $33/mo
• Annual: $391/yr
• Cap rate: 6.57%
• Cash-on-cash: 1.00%
• DSCR: 1.04
• 1% rule: 0.91%
• Cash to close: $39,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $33 ($391/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $128k (8.8% below list).
• It's been on market 223 days — a 12% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (12.0% below list) — sets the bar for market timing.
• In year one you build about $8k of equity ($968 loan paydown + $7k appreciation (4.9% local appreciation)).
• Location reads 70/100 on livability (#374 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: employment C-, amenities F, commute F.
• Pearsall ISD (town): math 12% / reading 19% proficiency, ranked #810 of 826 in TX (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Ted Flores El (520 students, 91% FRL); Pearsall J H (math 9% / reading 17%, grade F, #1,609 of 1,662 statewide, top 97%, 457 students, 80% FRL); Pearsall H S (math 17% / reading 28%, grade F, #1,354 of 1,632 statewide, top 83%, 614 students, 86% FRL).
• Market conditions: 45 active listings in the ZIP; 12 units permitted in Frio County in 2024 (0 in 5+ unit buildings).
• Frio County population projected at +50% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (4.9% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 223 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?
• 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.