503 Magnolia St

Pampa, TX 79065

$42,224D-

2 bd · 1.0 ba · 200 sqft · Built 1943 · SingleFamily · Active · 429 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,876/mo
• Mortgage (P&I): −$221
• Tax + insurance: −$70
• HOA: −$0
• Vac / Maint / Mgmt: −$394
• Net cashflow: $1,191/mo
• Annual: $14,286/yr
• Cap rate: 40.13%
• Cash-on-cash: 120.84%
• DSCR: 6.38
• 1% rule: 4.44%
• Cash to close: $11,823

Investor read

• This is a 2-bed/1.0-bath single-family listed at $42k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $42k).
• It's been on market 429 days — a 12% lower offer ($37k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $37k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $292 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#128 in TX, #3,885 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D+, crime F, commute F.
• Pampa ISD (town): math 38% / reading 36% proficiency, ranked #482 of 826 in TX (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Wilson El (math 32% / reading 32%, grade F, #2,268 of 4,322 statewide, top 55%, 370 students, 88% FRL); Pampa J H (math 32% / reading 31%, grade F, #997 of 1,662 statewide, top 61%, 738 students, 67% FRL); Pampa H S (math 49% / reading 37%, grade F, #713 of 1,632 statewide, top 44%, 1,046 students, 54% FRL) — zoned schools average 70% FRL vs 54% district-wide (15 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1943 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 182 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 7 units permitted in Gray County in 2024 (0 in 5+ unit buildings).
• Gray County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $12k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 429 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1943 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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.