1035 Palermo Dr

Beaumont, TX 77705

$135,000C-

4 bd · 2.0 ba · 1,771 sqft · Built 1968 · SingleFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,485/mo
• Mortgage (P&I): −$708
• Tax + insurance: −$267
• HOA: −$0
• Vac / Maint / Mgmt: −$312
• Net cashflow: $198/mo
• Annual: $2,376/yr
• Cap rate: 8.05%
• Cash-on-cash: 6.29%
• DSCR: 1.28
• 1% rule: 1.10%
• Cash to close: $37,800

Investor read

• This is a 4-bed/2.0-bath single-family listed at $135k.
• At list price, monthly cash flow is $198 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $135k).
• It's been on market 21 days — a 2% lower offer ($133k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $133k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $933 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#739 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, crime F, amenities F.
• Beaumont ISD (urban): math 14% / reading 22% proficiency, ranked #789 of 826 in TX (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Pietzsch/Mac Arthur El (math 5% / reading 7%, grade F, #4,315 of 4,322 statewide, top 100%, 1,083 students, 97% FRL); M L King Middle (math 6% / reading 12%, grade F, #1,653 of 1,662 statewide, top 99%, 480 students, 91% FRL); Beaumont United H S (math 8% / reading 16%, grade F, #1,554 of 1,632 statewide, top 95%, 2,131 students, 86% FRL) — zoned schools average 91% FRL vs 69% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 207 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; 343 units permitted in Jefferson County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts 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.
• Climate carrying-cost: severe wind risk, 99% 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 8.1% vs local median 5.3% in Beaumont — 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.
• This rent runs 33% of the median local income ($55k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1968 — 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 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?
• Crime grade is F 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?
• 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.