765 W Herring St

Sour Lake, TX 77659

$83,900C-

3 bd · 1.5 ba · 1,231 sqft · Built 1973 · SingleFamily · Active · 166 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $800/mo
• Mortgage (P&I): −$440
• Tax + insurance: −$271
• HOA: −$0
• Vac / Maint / Mgmt: −$168
• Net cashflow: $-79/mo
• Annual: $-950/yr
• Cap rate: 6.95%
• Cash-on-cash: 2.35%
• DSCR: 1.10
• 1% rule: 0.95%
• Cash to close: $23,492

Investor read

• This is a 3-bed/1.5-bath single-family listed at $84k.
• At list price, monthly cash flow is $-79 ($-950/yr) — negative.
• To cash-flow at today's rent, offer at most $70k (16.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $80k (4.6% below list).
• It's been on market 166 days — a 12% lower offer ($74k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $70k (16.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $580 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#352 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: amenities F, commute F.
• Hardin-Jefferson ISD (rural): math 54% / reading 49% proficiency, ranked #135 of 826 in TX (top 16%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Sour Lake El (math 43% / reading 43%, grade F, #1,283 of 4,322 statewide, top 30%, 767 students, 42% FRL); Henderson Middle (math 59% / reading 47%, grade C+, #281 of 1,662 statewide, top 18%, 617 students, 41% FRL); Hardin-Jefferson H S (math 68% / reading 67%, grade B, #158 of 1,632 statewide, top 10%, 749 students, 38% FRL).
• Watch-outs: flood insurance adds $125/mo.
• Market conditions: 94 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 358 units permitted in Hardin County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts 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.
• Climate carrying-cost: in FEMA flood zone A (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 6→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.0% vs local median 4.8% in Sour Lake — 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

• 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 166 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.