505 W Morgan St

Denison, TX 75020

$347,500B+

16 bd · 16.0 ba · 2,552 sqft · Built 1915 · MultiFamily · Active · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,800/mo
• Mortgage (P&I): −$1,822
• Tax + insurance: −$573
• HOA: −$0
• Vac / Maint / Mgmt: −$1,218
• Net cashflow: $2,186/mo
• Annual: $26,236/yr
• Cap rate: 13.84%
• Cash-on-cash: 26.96%
• DSCR: 2.20
• 1% rule: 1.67%
• Cash to close: $97,300

Investor read

• This is a 4 × 3-bed/1.5-bath units multifamily listed at $348k. Condition is rated good.
• At list price, monthly cash flow is $2k ($26k/yr) — positive. Per door: $547/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $348k).
• It's been on market 87 days — a 6% lower offer ($327k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $327k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#221 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: health & safety D+, amenities F, commute F.
• Denison ISD (urban): math 43% / reading 44% proficiency, ranked #315 of 826 in TX (top 38%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Terrell El (math 52% / reading 47%, grade D, #865 of 4,322 statewide, top 21%, 350 students, 76% FRL); Henry Scott Middle (math 36% / reading 48%, grade D-, #572 of 1,662 statewide, top 36%, 749 students, 66% FRL); Denison H S (math 53% / reading 53%, grade C-, #437 of 1,632 statewide, top 27%, 1,310 students, 58% FRL).
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 592 active listings in the ZIP; 2,272 units permitted in Grayson County in 2024 (750 in 5+ unit buildings).
• Grayson County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 3y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $97k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.8% vs local median 4.0% in Denison — 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 87 days. Have you received any prior offers? Is the seller open to a 6% 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?
• Built in 1915 — 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?
• 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.