12776 Valverde Loop

Elmo, TX 75161

$219,000D

2 bd · 2.0 ba · 891 sqft · Built 1991 · SingleFamily · Active · 188 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,914/mo
• Mortgage (P&I): −$1,148
• Tax + insurance: −$526
• HOA: −$0
• Vac / Maint / Mgmt: −$402
• Net cashflow: $-162/mo
• Annual: $-1,949/yr
• Cap rate: 5.40%
• Cash-on-cash: -3.18%
• DSCR: 0.86
• 1% rule: 0.87%
• Cash to close: $61,320

Investor read

• This is a 2-bed/2.0-bath single-family listed at $219k.
• At list price, monthly cash flow is $-162 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $190k (13.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $191k (12.6% below list).
• It's been on market 188 days — a 12% lower offer ($193k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $190k (13.1% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 57/100 on livability (#1,234 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+, crime A; Watch: employment D, amenities F, commute F.
• Terrell ISD (town): math 25% / reading 30% proficiency, ranked #677 of 826 in TX (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: W H Burnett El (329 students, 79% FRL); Herman Furlough Jr Middle (math 28% / reading 28%, grade F, #1,143 of 1,662 statewide, top 69%, 1,168 students, 64% FRL); Terrell H S (math 24% / reading 38%, grade F, #1,077 of 1,632 statewide, top 66%, 1,466 students, 56% FRL) — zoned schools at 67% FRL track the district average.
• Market conditions: 89 active listings in the ZIP; 1,747 units permitted in Kaufman County in 2024 (180 in 5+ unit buildings).
• Kaufman County population projected at +43% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 4y ago; this cycle's ask has dropped $21k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 2.9% in Elmo — 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 188 days. Have you received any prior offers? Is the seller open to a 13% 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?
• 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.