Adams Plan

Cove, TX 77523

$239,990F

3 bd · 2.0 ba · 1,204 sqft · Built — · SingleFamily · Active · 464 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,564/mo
• Mortgage (P&I): −$1,520
• Tax + insurance: −$483
• HOA: −$0
• Vac / Maint / Mgmt: −$329
• Net cashflow: $-767/mo
• Annual: $-9,202/yr
• Cap rate: 3.12%
• Cash-on-cash: -11.34%
• DSCR: 0.50
• 1% rule: 0.54%
• Cash to close: $81,142

Investor read

• This is a 3-bed/2.0-bath single-family listed at $240k.
• At list price, monthly cash flow is $-767 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $179k (25.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $156k (34.8% below list).
• It's been on market 464 days — a 12% lower offer ($211k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $156k (34.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#766 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A; Watch: schools D, amenities F, commute F.
• Barbers Hill ISD (rural): math 72% / reading 65% proficiency, ranked #12 of 826 in TX (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+3.4%/yr); 781 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals leasing fast (median 6d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 629 units permitted in Chambers County in 2024 (0 in 5+ unit buildings).
• Chambers County population projected at +46% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 3.1% vs local median 5.3% in Cove — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent is only 15% of the median local income ($124k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 464 days. Have you received any prior offers? Is the seller open to a 35% concession, seller financing, or rate buy-down credit?
• 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?
• 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.