420 Stone Hollow Dr

Ferris, TX 75125

$379,900B

4 bd · 2.5 ba · 2,391 sqft · Built 2022 · SingleFamily · Active · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,826/mo
• Mortgage (P&I): −$1,992
• Tax + insurance: −$792
• HOA: −$41
• Vac / Maint / Mgmt: −$2,274
• Net cashflow: $5,728/mo
• Annual: $68,735/yr
• Cap rate: 24.39%
• Cash-on-cash: 64.62%
• DSCR: 3.88
• 1% rule: 2.85%
• Cash to close: $106,372

Investor read

• This is a 4-bed/2.5-bath single-family listed at $380k. Condition is rated good.
• At list price, monthly cash flow is $6k ($69k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($11k rent vs $380k).
• It's been on market 28 days — a 2% lower offer ($374k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $374k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#401 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities F, commute F.
• Ferris ISD (rural): math 28% / reading 29% proficiency, ranked #634 of 826 in TX (top 77%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Lucy Mae Mcdonald El (math 40% / reading 33%, grade F, #1,883 of 4,322 statewide, top 44%, 620 students, 83% FRL) — zoned schools average 83% FRL vs 67% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 124 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 3,016 units permitted in Ellis County in 2024 (20 in 5+ unit buildings).
• Ellis County population projected at +36% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $106k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 24.4% vs local median 4.4% in Ferris — 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 does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.