2338 Stillwater Dr

Mesquite, TX 75181

$275,000D

3 bd · 2.0 ba · 1,765 sqft · Built 1991 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,641/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$668
• HOA: −$0
• Vac / Maint / Mgmt: −$555
• Net cashflow: $-24/mo
• Annual: $-285/yr
• Cap rate: 6.19%
• Cash-on-cash: -0.37%
• DSCR: 0.98
• 1% rule: 0.96%
• Cash to close: $77,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $275k.
• At list price, monthly cash flow is $-24 ($-285/yr) — negative.
• To cash-flow at today's rent, offer at most $271k (1.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $264k (3.9% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $264k (3.9% 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 $8k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#358 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: crime F, commute F.
• Mesquite ISD (suburban): math 35% / reading 32% proficiency, ranked #536 of 826 in TX (top 65%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Thompson El (math 20% / reading 27%, grade F, #3,247 of 4,322 statewide, top 76%, 608 students, 85% FRL); Terry Middle (math 34% / reading 32%, grade F, #930 of 1,662 statewide, top 57%, 1,049 students, 82% FRL); Horn H S (math 41% / reading 36%, grade F, #866 of 1,632 statewide, top 54%, 3,029 students, 74% FRL) — zoned schools average 80% FRL vs 63% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 598 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 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.
• 14 sale attempts since 14y ago; this cycle's ask is 11857% 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→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 4.4% in Mesquite — 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?
• 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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.