2404-2406 Colony Ct

Dallas, TX 75235

$340,000F

2 bd · 1.0 ba · 776 sqft · Built 1947 · MultiFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,581/mo
• Mortgage (P&I): −$1,783
• Tax + insurance: −$427
• HOA: −$0
• Vac / Maint / Mgmt: −$542
• Net cashflow: $-171/mo
• Annual: $-2,055/yr
• Cap rate: 5.69%
• Cash-on-cash: -2.16%
• DSCR: 0.90
• 1% rule: 0.76%
• Cash to close: $95,200

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $340k.
• At list price, monthly cash flow is $-171 ($-2k/yr) — negative. Per door: $-86/mo.
• To cash-flow at today's rent, offer at most $310k (8.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $258k (24.1% below list).
• It's been on market 21 days — a 2% lower offer ($335k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $258k (24.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#24 in TX, #1,380 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: crime F.
• Dallas ISD (urban): math 31% / reading 36% proficiency, ranked #559 of 826 in TX (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 83% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Obadiah Knight El (math 42% / reading 37%, grade F, #1,545 of 4,322 statewide, top 38%, 317 students, 94% FRL).
• Watch-outs: built in 1947 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.7%/yr); 85 active listings in the ZIP; 32 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 12,577 units permitted in Dallas County in 2024 (6,829 in 5+ unit buildings).
• Dallas County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask is 3% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 2.3% in Dallas — 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 $2,581/mo this rent would consume 49% of the median local household income ($63k/yr) (locally 1427% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1947 — 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.
• 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.