900 Dearborn

Waco, TX 76704

$75,000B+

3 bd · 1.0 ba · 921 sqft · Built 1976 · SingleFamily · Active · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,363/mo
• Mortgage (P&I): −$393
• Tax + insurance: −$302
• HOA: −$0
• Vac / Maint / Mgmt: −$286
• Net cashflow: $381/mo
• Annual: $4,574/yr
• Cap rate: 13.46%
• Cash-on-cash: 25.58%
• DSCR: 2.14
• 1% rule: 1.82%
• Cash to close: $21,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $75k. Condition is rated fair.
• At list price, monthly cash flow is $381 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $75k).
• It's been on market 37 days — a 3% lower offer ($73k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $73k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $519 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#166 in TX, #4,378 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D, commute F, employment D-.
• Waco ISD (urban): math 20% / reading 24% proficiency, ranked #773 of 826 in TX (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: South Waco El (math 8% / reading 22%, grade F, #4,021 of 4,322 statewide, top 94%, 462 students, 96% FRL); G W Carver Middle (math 9% / reading 13%, grade F, #1,634 of 1,662 statewide, top 99%, 393 students, 96% FRL, charter); Waco H S (math 26% / reading 24%, grade F, #1,250 of 1,632 statewide, top 77%, 2,011 students, 88% FRL).
• Watch-outs: property tax is 3.3% of price; flood insurance adds $66/mo.
• Market conditions: 123 active listings in the ZIP; 33 comparable units currently listed for rent nearby; rentals leasing fast (median 6d on market — plan ~1-2 weeks tenant-placement turnaround); 48% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 1,014 units permitted in McLennan County in 2024 (200 in 5+ unit buildings).
• McLennan County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $21k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk; major wind risk, 58% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.5% vs local median 3.9% in Waco — 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.
• At $1,363/mo this rent would consume 54% of the median local household income ($30k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 37 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1976 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 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?

Repairs flagged (vision-AI assessment)

• Major: roof — Significant damage and discoloration indicate a major repair or replacement is needed.
• Minor: exterior walls — Some discoloration and minor damage are visible, which may be related to the roof condition.
• Major: landscaping — The landscaping is overgrown and in need of trimming, which detracts from the curb appeal of the property.