400 E Cotton St

Longview, TX 75601

$149,000B

4 bd · 4.0 ba · 2,112 sqft · Built 1946 · MultiFamily · Active · 188 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,487/mo
• Mortgage (P&I): −$781
• Tax + insurance: −$269
• HOA: −$0
• Vac / Maint / Mgmt: −$522
• Net cashflow: $914/mo
• Annual: $10,974/yr
• Cap rate: 13.66%
• Cash-on-cash: 26.30%
• DSCR: 2.17
• 1% rule: 1.67%
• Cash to close: $41,720

Investor read

• This is a 2 × 2-bed/2-bath units multifamily listed at $149k. Condition is rated fair.
• At list price, monthly cash flow is $914 ($11k/yr) — positive. Per door: $457/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $149k).
• It's been on market 188 days — a 12% lower offer ($131k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $131k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#213 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, crime D+, amenities F.
• Longview ISD (urban): math 49% / reading 46% proficiency, ranked #244 of 826 in TX (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Longview H S (math 61% / reading 52%, grade C, #357 of 1,632 statewide, top 22%, 2,170 students, 82% FRL, charter) — zoned schools average 82% FRL vs 66% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 223 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals leasing fast (median 6d on market — plan ~1-2 weeks tenant-placement turnaround); 193 units permitted in Gregg County in 2024 (0 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 3.3% rent growth), your $42k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 56% 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 13.7% vs local median 3.2% in Longview — 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 188 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1946 — 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?

Repairs flagged (vision-AI assessment)

• Major: roof — The satellite image shows significant wear on the roof.
• Major: exterior siding — The satellite image shows weathered siding.
• Major: flooring — The flooring appears worn and in need of refinishing.