502 S Elm St

Celeste, TX 75423

$165,000C-

3 bd · 2.0 ba · 1,156 sqft · Built 1970 · SingleFamily · Active · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,276/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$264
• HOA: −$0
• Vac / Maint / Mgmt: −$268
• Net cashflow: $-121/mo
• Annual: $-1,456/yr
• Cap rate: 5.41%
• Cash-on-cash: -3.15%
• DSCR: 0.86
• 1% rule: 0.77%
• Cash to close: $46,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $-121 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (13.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $128k (22.7% below list).
• It's been on market 24 days — a 2% lower offer ($163k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $128k (22.7% below list) — sets the bar for 1% rule.
• In year one you build about $18k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 60/100 on livability (#1,095 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: amenities F, commute F, employment F.
• Celeste ISD (rural): math 42% / reading 45% proficiency, ranked #292 of 826 in TX (top 35%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Celeste El (math 27% / reading 42%, grade F, #1,995 of 4,322 statewide, top 50%, 254 students, 65% FRL); Celeste J H (math 57% / reading 42%, grade C, #356 of 1,662 statewide, top 23%, 102 students, 62% FRL); Celeste H S (math 44% / reading 54%, grade D, #509 of 1,632 statewide, top 34%, 163 students, 55% FRL).
• Market conditions: 113 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,289 units permitted in Hunt County in 2024 (527 in 5+ unit buildings).
• Hunt County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• By year 3, paydown + projected appreciation supports a ~$45k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 2.0% in Celeste — 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 1970 — 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.
• 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.