3520 Bagby Ave

Waco, TX 76711

$149,900D

2 bd · 1.0 ba · 981 sqft · Built 1952 · SingleFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,313/mo
• Mortgage (P&I): −$786
• Tax + insurance: −$344
• HOA: −$0
• Vac / Maint / Mgmt: −$276
• Net cashflow: $-93/mo
• Annual: $-1,118/yr
• Cap rate: 5.55%
• Cash-on-cash: -2.66%
• DSCR: 0.88
• 1% rule: 0.88%
• Cash to close: $41,972

Investor read

• This is a 2-bed/1.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $-93 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $133k (11.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $131k (12.4% below list).
• It's been on market 17 days — a 2% lower offer ($148k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $131k (12.4% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($1k loan paydown + $5k appreciation (3.6% local appreciation)).
• Location reads 74/100 on livability (#166 in TX, #4,378 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D, commute F, employment D-.
• Waco ISD (urban): math 20% / reading 24% proficiency, ranked #773 of 826 in TX (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Alta Vista El (math 12% / reading 12%, grade F, #4,207 of 4,322 statewide, top 98%, 545 students, 89% FRL, charter).
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.6%/yr); 43 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); 1,014 units permitted in McLennan County in 2024 (200 in 5+ unit buildings).
• McLennan County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 6y 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.
• By year 6, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 61% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.5% vs local median 3.9% in Waco — 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?
• Built in 1952 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.