20489 W Grove Club Lake Rd

Whitehouse, TX 75791

$229,900D+

3 bd · 1.0 ba · 952 sqft · Built 1935 · SingleFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,626/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$138
• HOA: −$75
• Vac / Maint / Mgmt: −$341
• Net cashflow: $-134/mo
• Annual: $-1,605/yr
• Cap rate: 5.59%
• Cash-on-cash: -2.49%
• DSCR: 0.89
• 1% rule: 0.71%
• Cash to close: $64,372

Investor read

• This is a 3-bed/1.0-bath single-family listed at $230k.
• At list price, monthly cash flow is $-134 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $206k (10.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $163k (29.3% below list).
• It's been on market 23 days — a 2% lower offer ($226k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $163k (29.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#55 in TX, #2,180 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Whitehouse ISD (suburban): math 68% / reading 59% proficiency, ranked #38 of 826 in TX (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.9%/yr); 196 active listings in the ZIP; solid renter incomes; 595 units permitted in Smith County in 2024 (45 in 5+ unit buildings).
• Smith County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 3y ago; this cycle's ask has dropped $20k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 63% chance of damaging wind over 30y; moderate 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 5.6% vs local median 3.7% in Whitehouse — 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 1935 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.