146 Cottonwood Cv

Holly Lake Ranch, TX 75765

$194,000D

2 bd · 3.0 ba · 952 sqft · Built 1994 · SingleFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,553/mo
• Mortgage (P&I): −$1,017
• Tax + insurance: −$353
• HOA: −$182
• Vac / Maint / Mgmt: −$326
• Net cashflow: $-326/mo
• Annual: $-3,907/yr
• Cap rate: 4.69%
• Cash-on-cash: -5.72%
• DSCR: 0.75
• 1% rule: 0.80%
• Cash to close: $54,320

Investor read

• This is a 2-bed/3.0-bath single-family listed at $194k.
• At list price, monthly cash flow is $-326 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $136k (29.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $155k (19.9% below list).
• It's been on market 55 days — a 3% lower offer ($188k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $136k (29.6% below list) — sets the bar for cash-flow.
• In year one you build about $7k of equity ($1k loan paydown + $6k appreciation (3.1% local appreciation)).
• Location reads 66/100 on livability (#597 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety D-.
• Harmony ISD (rural): math 48% / reading 47% proficiency, ranked #224 of 826 in TX (top 27%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Harmony El (math 52% / reading 47%, grade D, #865 of 4,322 statewide, top 21%, 313 students, 62% FRL); Harmony J H (math 45% / reading 43%, grade D, #512 of 1,662 statewide, top 32%, 258 students, 46% FRL); Harmony H S (math 37% / reading 57%, grade D-, #591 of 1,632 statewide, top 38%, 282 students, 53% FRL).
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 216 active listings in the ZIP; 72 units permitted in Wood County in 2024 (29 in 5+ unit buildings).
• Wood County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 11y 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.
• By year 5, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe flood risk; major wind risk, 50% 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 4.7% vs local median 3.8% in Holly Lake Ranch — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 55 days. Have you received any prior offers? Is the seller open to a 30% 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?
• 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?
• 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.