603 Davis St #2007

Austin, TX 78701

$395,000D

1 bd · 1.0 ba · 879 sqft · Built 2006 · Condo · Active · 129 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,080/mo
• Mortgage (P&I): −$2,071
• Tax + insurance: −$931
• HOA: −$540
• Vac / Maint / Mgmt: −$647
• Net cashflow: $-1,109/mo
• Annual: $-13,307/yr
• Cap rate: 3.13%
• Cash-on-cash: -11.31%
• DSCR: 0.50
• 1% rule: 0.78%
• Cash to close: $110,600

Investor read

• This is a 1-bed/1.0-bath condo listed at $395k.
• At list price, monthly cash flow is $-1k ($-13k/yr) — negative.
• To cash-flow at today's rent, offer at most $199k (49.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $308k (22.0% below list).
• It's been on market 129 days — a 12% lower offer ($348k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $199k (49.6% below list) — sets the bar for cash-flow.
• In year one you build about $927 of equity ($3k loan paydown + $-2k appreciation (-0.5% local appreciation)).
• Location reads 82/100 on livability (#16 in TX, #1,208 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living D, crime F.
• Austin ISD (urban): math 33% / reading 44% proficiency, ranked #431 of 826 in TX (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising (+2.5%/yr); 301 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 52% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 17,121 units permitted in Travis County in 2024 (11,963 in 5+ unit buildings).
• Travis County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 13y ago; this cycle's ask has dropped $30k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 6→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.1% vs local median 1.8% in Austin — 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?
• It's been on market 129 days. Have you received any prior offers? Is the seller open to a 50% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.
• 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?