105 Texas Ave

Newcastle, TX 76372

$38,000A-

3 bd · 2.0 ba · 1,710 sqft · Built 1925 · SingleFamily · Active · 104 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,233/mo
• Mortgage (P&I): −$199
• Tax + insurance: −$65
• HOA: −$0
• Vac / Maint / Mgmt: −$259
• Net cashflow: $710/mo
• Annual: $8,518/yr
• Cap rate: 28.71%
• Cash-on-cash: 80.06%
• DSCR: 4.56
• 1% rule: 3.25%
• Cash to close: $10,640

Investor read

• This is a 3-bed/2.0-bath single-family listed at $38k.
• At list price, monthly cash flow is $710 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $38k).
• It's been on market 104 days — a 9% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (9.0% below list) — sets the bar for market timing.
• In year one you build about $573 of equity ($263 loan paydown + $310 appreciation (0.8% local appreciation)).
• Location reads 59/100 on livability (#1,162 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: health & safety C-, schools D, crime F.
• Newcastle ISD (rural): math 55% / reading 45% proficiency, ranked #389 of 1,141 in TX (top 34%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 10 active listings in the ZIP; 5 units permitted in Young County in 2024 (0 in 5+ unit buildings).
• Young County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (0.8% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• 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 104 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1925 — 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?
• 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.