205 E 2nd St

Hearne, TX 77859

$156,000D

3 bd · 1.5 ba · 1,072 sqft · Built 2014 · SingleFamily · Active · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,439/mo
• Mortgage (P&I): −$818
• Tax + insurance: −$338
• HOA: −$0
• Vac / Maint / Mgmt: −$302
• Net cashflow: $-20/mo
• Annual: $-240/yr
• Cap rate: 6.14%
• Cash-on-cash: -0.55%
• DSCR: 0.98
• 1% rule: 0.92%
• Cash to close: $43,680

Investor read

• This is a 3-bed/1.5-bath single-family listed at $156k.
• At list price, monthly cash flow is $-20 ($-240/yr) — negative.
• To cash-flow at today's rent, offer at most $152k (2.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $144k (7.8% below list).
• It's been on market 31 days — a 3% lower offer ($151k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $144k (7.8% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 66/100 on livability (#611 in TX) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F, employment F, health & safety F.
• Hearne ISD (town): math 10% / reading 18% proficiency, ranked #816 of 826 in TX (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 88% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Hearne El (math 12% / reading 20%, grade F, #3,974 of 4,322 statewide, top 92%, 408 students, 94% FRL, charter); Hearne J H (math 8% / reading 12%, charter); Hearne Jh/Hs (math 8% / reading 17%, grade F, #1,552 of 1,632 statewide, top 95%, 343 students, 96% FRL).
• Market conditions: 93 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 23 units permitted in Robertson County in 2023 (0 in 5+ unit buildings).
• 6 sale attempts since 5y 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.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $44k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 5.1% in Hearne — 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 31 days. Have you received any prior offers? Is the seller open to a 8% concession, seller financing, or rate buy-down credit?
• 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?
• 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.