Plan 1242 Plan

Arcola, TX 77583

$227,995D-

3 bd · 2.0 ba · 1,242 sqft · Built — · SingleFamily · Active · 706 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,137/mo
• Mortgage (P&I): −$1,407
• Tax + insurance: −$447
• HOA: −$0
• Vac / Maint / Mgmt: −$449
• Net cashflow: $-165/mo
• Annual: $-1,983/yr
• Cap rate: 5.55%
• Cash-on-cash: -2.64%
• DSCR: 0.88
• 1% rule: 0.80%
• Cash to close: $75,112

Investor read

• This is a 3-bed/2.0-bath single-family listed at $228k. Condition is rated excellent.
• At list price, monthly cash flow is $-165 ($-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 $214k (6.3% below list).
• It's been on market 706 days — a 12% lower offer ($201k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $201k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 53/100 on livability (#1,425 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A; Watch: employment C-, crime F, amenities F.
• Fort Bend ISD (suburban): math 44% / reading 53% proficiency, ranked #140 of 826 in TX (top 17%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Heritage Rose El (math 29% / reading 28%, grade F, #2,706 of 4,322 statewide, top 63%, 1,209 students, 83% FRL); Billy Baines Middle (math 47% / reading 53%, grade C, #347 of 1,662 statewide, top 21%, 1,296 students, 37% FRL); Ridge Point H S (math 61% / reading 69%, grade B, #198 of 1,632 statewide, top 12%, 3,170 students, 31% FRL) — zoned schools average 50% FRL vs 35% district-wide (15 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 1917 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 36d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 12,093 units permitted in Fort Bend County in 2024 (815 in 5+ unit buildings).
• Fort Bend County population projected at +75% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y ago 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: severe wind risk, 99% 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 5.6% vs local median 4.4% in Arcola — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 706 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 F-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.