2889 S County Road 406

Henderson, TX 75654

$255,000D-

3 bd · 2.0 ba · 1,760 sqft · Built 2013 · SingleFamily · Active · 66 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,241/mo
• Mortgage (P&I): −$1,337
• Tax + insurance: −$485
• HOA: −$0
• Vac / Maint / Mgmt: −$261
• Net cashflow: $-842/mo
• Annual: $-10,107/yr
• Cap rate: 2.33%
• Cash-on-cash: -14.15%
• DSCR: 0.37
• 1% rule: 0.49%
• Cash to close: $71,400

Investor read

• This is a 3-bed/2.0-bath single-family listed at $255k.
• At list price, monthly cash flow is $-842 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $106k (58.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $124k (51.3% below list).
• It's been on market 66 days — a 6% lower offer ($240k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (58.3% below list) — sets the bar for cash-flow.
• In year one you build about $27k of equity ($2k loan paydown + $26k appreciation (10.0% local appreciation)).
• Location reads 69/100 on livability (#408 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.
• West Rusk County Consolidated ISD (rural): math 41% / reading 43% proficiency, ranked #351 of 826 in TX (top 42%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 65% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: West Rusk El (223 students, 80% FRL); West Rusk Middle (math 50% / reading 47%, grade C-, #392 of 1,662 statewide, top 24%, 246 students, 74% FRL); West Rusk H S (math 42% / reading 42%, grade F, #730 of 1,632 statewide, top 47%, 369 students, 70% FRL).
• Market conditions: 181 active listings in the ZIP; 4 units permitted in Rusk County in 2024 (0 in 5+ unit buildings).
• Rusk County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• By year 2, paydown + projected appreciation supports a ~$44k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 68% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.3% vs local median 2.9% in Henderson — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 66 days. Have you received any prior offers? Is the seller open to a 58% 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?
• 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?
• 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.