901 N Howeth

Gainesville, TX 76240

$199,000D+

3 bd · 2.0 ba · 1,705 sqft · Built 1945 · SingleFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,742/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$282
• HOA: −$0
• Vac / Maint / Mgmt: −$366
• Net cashflow: $51/mo
• Annual: $612/yr
• Cap rate: 6.60%
• Cash-on-cash: 1.10%
• DSCR: 1.05
• 1% rule: 0.88%
• Cash to close: $55,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $199k.
• At list price, monthly cash flow is $51 ($612/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $174k (12.5% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $174k (12.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#602 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: amenities F, commute F, employment F.
• Gainesville ISD (rural): math 33% / reading 29% proficiency, ranked #606 of 826 in TX (top 73%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Edison El (683 students, 81% FRL).
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 462 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 190 units permitted in Cooke County in 2024 (0 in 5+ unit buildings).
• 4 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.
• Current owner paid $44k; list at $199k implies a 357% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 3.7% in Gainesville — 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

• Built in 1945 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.