111 Kentucky St

Palestine, TX 75801

$125,000B

3 bd · 2.0 ba · 1,680 sqft · Built — · SingleFamily · Active · 334 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,646/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$183
• HOA: −$0
• Vac / Maint / Mgmt: −$346
• Net cashflow: $462/mo
• Annual: $5,540/yr
• Cap rate: 10.73%
• Cash-on-cash: 15.83%
• DSCR: 1.70
• 1% rule: 1.32%
• Cash to close: $35,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $462 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $125k).
• It's been on market 334 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#657 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime D+, schools D, employment D.
• Palestine ISD (town): math 36% / reading 37% proficiency, ranked #509 of 826 in TX (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 201 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 29 units permitted in Anderson County in 2024 (0 in 5+ unit buildings).
• Anderson County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 7 sale attempts since 3y ago 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 74% chance of damaging wind over 30y; extreme-heat days projected 5→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.7% vs local median 3.9% in Palestine — 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 35% of the median local income ($57k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 334 days. Have you received any prior offers? Is the seller open to a 12% 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 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?
• 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.