2626 Fm 1854

Lockhart, TX 78616

$234,999C+

3 bd · 2.5 ba · 1,568 sqft · Built 2001 · SingleFamily · Active · 136 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,005/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$270
• HOA: −$0
• Vac / Maint / Mgmt: −$421
• Net cashflow: $82/mo
• Annual: $983/yr
• Cap rate: 7.05%
• Cash-on-cash: 2.71%
• DSCR: 1.12
• 1% rule: 0.85%
• Cash to close: $65,800

Investor read

• This is a 3-bed/2.5-bath single-family listed at $235k. Condition is rated fair.
• At list price, monthly cash flow is $82 ($983/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $201k (14.7% below list).
• It's been on market 136 days — a 12% lower offer ($207k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $201k (14.7% below list) — sets the bar for 1% rule.
• In year one you build about $25k of equity ($2k loan paydown + $24k appreciation (10.0% local appreciation)).
• Location reads 67/100 on livability (#535 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B+; Watch: schools D-, amenities F, commute F.
• Lockhart ISD (town): math 27% / reading 29% proficiency, ranked #657 of 826 in TX (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 203 active listings in the ZIP; 529 units permitted in Caldwell County in 2024 (6 in 5+ unit buildings).
• Caldwell County population projected at +33% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $66k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$40k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; severe wind risk, 80% 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 7.1% vs local median 3.0% in Lockhart — 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.

Questions for listing agent

• It's been on market 136 days. Have you received any prior offers? Is the seller open to a 15% 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Minor: kitchen cabinets — Slight wear
• Minor: bathroom fixtures — Slight wear
• Minor: flooring — Some wear
• Minor: interior paint — Some wear
• Minor: HVAC filters — Standard maintenance