3740 Lakeview Cutoff Rd

Pine Forest, TX 77662

$188,000D

3 bd · 2.0 ba · 1,480 sqft · Built 1958 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,503/mo
• Mortgage (P&I): −$986
• Tax + insurance: −$354
• HOA: −$0
• Vac / Maint / Mgmt: −$316
• Net cashflow: $-152/mo
• Annual: $-1,828/yr
• Cap rate: 5.32%
• Cash-on-cash: -3.47%
• DSCR: 0.85
• 1% rule: 0.80%
• Cash to close: $52,640

Investor read

• This is a 3-bed/2.0-bath single-family listed at $188k.
• At list price, monthly cash flow is $-152 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $161k (14.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $150k (20.0% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $150k (20.0% 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 65/100 on livability (#659 in TX) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime D, schools F, amenities F.
• Vidor ISD (suburban): math 41% / reading 39% proficiency, ranked #422 of 826 in TX (top 51%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 241 active listings in the ZIP; 235 units permitted in Orange County in 2024 (50 in 5+ unit buildings).
• Orange County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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?
• Built in 1958 — 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?
• Crime grade is D 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?
• 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.