1214 Baylor Ave #205

Waco, TX 76706

$117,000D

2 bd · 2.0 ba · 832 sqft · Built 1983 · Condo · Active · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,191/mo
• Mortgage (P&I): −$614
• Tax + insurance: −$195
• HOA: −$152
• Vac / Maint / Mgmt: −$250
• Net cashflow: $-20/mo
• Annual: $-235/yr
• Cap rate: 6.09%
• Cash-on-cash: -0.72%
• DSCR: 0.97
• 1% rule: 1.02%
• Cash to close: $32,760

Investor read

• This is a 2-bed/2.0-bath condo listed at $117k. Condition is rated good.
• At list price, monthly cash flow is $-20 ($-235/yr) — negative.
• To cash-flow at today's rent, offer at most $114k (2.4% below list).
• Meets the 1% rule at list price ($1k rent vs $117k).
• It's been on market 27 days — a 2% lower offer ($115k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (2.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $809 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• 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: South Waco El (math 8% / reading 22%, grade F, #4,021 of 4,322 statewide, top 94%, 462 students, 96% FRL).
• Market conditions: Rents rising (+1.9%/yr); 317 active listings in the ZIP; 38 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 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.
• 3 sale attempts since 2y 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.
• Climate carrying-cost: major wind risk, 55% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% 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.
• This rent runs 34% of the median local income ($42k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.