Plan 1609 Plan

Magnolia, TX 77354

$215,995D

3 bd · 2.5 ba · 1,609 sqft · Built — · SingleFamily · Active · 320 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,044/mo
• Mortgage (P&I): −$1,344
• Tax + insurance: −$427
• HOA: −$0
• Vac / Maint / Mgmt: −$429
• Net cashflow: $-157/mo
• Annual: $-1,881/yr
• Cap rate: 5.56%
• Cash-on-cash: -2.62%
• DSCR: 0.88
• 1% rule: 0.80%
• Cash to close: $71,772

Investor read

• This is a 3-bed/2.5-bath single-family listed at $216k. Condition is rated poor.
• At list price, monthly cash flow is $-157 ($-2k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $204k (5.4% below list).
• It's been on market 320 days — a 12% lower offer ($190k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $190k (12.0% below list) — sets the bar for market timing.
• In year one you build about $27k of equity ($2k loan paydown + $26k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#222 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Magnolia ISD (rural): math 42% / reading 45% proficiency, ranked #247 of 826 in TX (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Magnolia El (math 22% / reading 28%, grade F, #3,013 of 4,322 statewide, top 70%, 649 students, 64% FRL); Magnolia J H (math 35% / reading 37%, grade F, #805 of 1,662 statewide, top 50%, 1,103 students, 57% FRL); Magnolia West H S (math 41% / reading 53%, grade D-, #591 of 1,632 statewide, top 38%, 2,208 students, 52% FRL) — zoned schools average 58% FRL vs 39% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 1622 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 13,259 units permitted in Montgomery County in 2024 (1,402 in 5+ unit buildings).
• Montgomery County population projected at +65% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$44k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.6% vs local median 3.4% in Magnolia — 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 320 days. Have you received any prior offers? Is the seller open to a 12% 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?
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Major: exterior siding — No photos of exterior siding.
• Major: roof — No photos of roof.
• Major: windows — No photos of windows.
• Major: HVAC/mechanical — No photos of HVAC/mechanical systems.
• Major: landscaping — No photos of landscaping/curb appeal.