The Fallow Plan

Lubbock, TX 79416

$243,990F

5 bd · 2.5 ba · 1,917 sqft · Built — · SingleFamily · Active · 131 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,115/mo
• Mortgage (P&I): −$1,759
• Tax + insurance: −$559
• HOA: −$0
• Vac / Maint / Mgmt: −$444
• Net cashflow: $-647/mo
• Annual: $-7,770/yr
• Cap rate: 3.98%
• Cash-on-cash: -8.27%
• DSCR: 0.63
• 1% rule: 0.63%
• Cash to close: $93,915

Investor read

• This is a 5-bed/2.5-bath single-family listed at $244k. Condition is rated good.
• At list price, monthly cash flow is $-647 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $242k (0.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $211k (13.3% below list).
• It's been on market 131 days — a 12% lower offer ($215k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $211k (13.3% 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 $10k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#37 in TX, #1,749 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, schools D+, crime F.
• Frenship ISD (urban): math 47% / reading 54% proficiency, ranked #162 of 826 in TX (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+2.2%/yr); 464 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 2,219 units permitted in Lubbock County in 2024 (252 in 5+ unit buildings).
• Lubbock County population projected at +39% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 40% of the median local income ($64k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 131 days. Have you received any prior offers? Is the seller open to a 13% 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 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.