408 Avenue B

Forsan, TX 79733

$90,000B

5 bd · 4.0 ba · 5,195 sqft · Built 1980 · SingleFamily · Active · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,498/mo
• Mortgage (P&I): −$472
• Tax + insurance: −$150
• HOA: −$0
• Vac / Maint / Mgmt: −$315
• Net cashflow: $562/mo
• Annual: $6,742/yr
• Cap rate: 13.78%
• Cash-on-cash: 26.75%
• DSCR: 2.19
• 1% rule: 1.66%
• Cash to close: $25,200

Investor read

• This is a 5-bed/4.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $562 ($7k/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 87 days — a 6% lower offer ($85k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $85k (6.0% below list) — sets the bar for market timing.
• In year one you build about $3k of equity ($622 loan paydown + $3k appreciation (3.0% local appreciation)).
• Location reads 69/100 on livability (#418 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: health & safety C-, schools D+, crime F.
• Forsan ISD (rural): math 39% / reading 46% proficiency, ranked #259 of 826 in TX (top 31%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 19% free/reduced lunch — higher-income household profile.
• Market conditions: 5 active listings in the ZIP; 69 units permitted in Howard County in 2024 (5 in 5+ unit buildings).
• Howard County population projected at +42% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 10, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 87 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• 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?
• Crime grade is F 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?
• 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.