503 Katy Blvd

Bonham, TX 75418

$90,000B-

2 bd · 2.0 ba · 1,125 sqft · Built 1940 · SingleFamily · Active · 407 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,355/mo
• Mortgage (P&I): −$472
• Tax + insurance: −$132
• HOA: −$0
• Vac / Maint / Mgmt: −$285
• Net cashflow: $466/mo
• Annual: $5,595/yr
• Cap rate: 12.51%
• Cash-on-cash: 22.20%
• DSCR: 1.99
• 1% rule: 1.51%
• Cash to close: $25,200

Investor read

• This is a 2-bed/2.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $466 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $90k).
• It's been on market 407 days — a 12% lower offer ($79k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $79k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $622 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#785 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D, schools D-, amenities F.
• Bonham ISD (town): math 37% / reading 38% proficiency, ranked #477 of 826 in TX (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 277 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 87% of comp listings sitting > 30 days — soft ceiling on asking rent; 82 units permitted in Fannin County in 2024 (0 in 5+ unit buildings).
• Fannin County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 5y ago; this cycle's ask has dropped $6k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.5% vs local median 3.5% in Bonham — 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

• It's been on market 407 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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.