833 Blue Heron

Paloma Creek, TX 76227

$6,511D

3 bd · 2.0 ba · 1,733 sqft · Built 2008 · SingleFamily · Active · 35 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,107/mo
• Mortgage (P&I): −$34
• Tax + insurance: −$11
• HOA: −$0
• Vac / Maint / Mgmt: −$443
• Net cashflow: $1,620/mo
• Annual: $19,437/yr
• Cap rate: 304.83%
• Cash-on-cash: 1066.19%
• DSCR: 48.44
• 1% rule: 32.37%
• Cash to close: $1,823

Investor read

• This is a 3-bed/2.0-bath single-family listed at $7k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $7k).
• It's been on market 35 days — a 3% lower offer ($6k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $6k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $45 of loan paydown is wiped out by about $195 of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#125 in TX, #3,857 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F.
• Denton ISD (urban): math 36% / reading 43% proficiency, ranked #383 of 826 in TX (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents soft (-1.9%/yr); 1885 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 10,531 units permitted in Denton County in 2024 (2,713 in 5+ unit buildings).
• Denton County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 10y ago; this cycle's ask has dropped $243k (97%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $2k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 304.8% vs local median 4.4% in Paloma Creek — 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 35 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• 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.