505 E FM 501

Cherokee, TX 76832

$189,000D

3 bd · 1.5 ba · 1,346 sqft · Built 1961 · SingleFamily · Active · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,162/mo
• Mortgage (P&I): −$991
• Tax + insurance: −$163
• HOA: −$0
• Vac / Maint / Mgmt: −$244
• Net cashflow: $-237/mo
• Annual: $-2,839/yr
• Cap rate: 4.79%
• Cash-on-cash: -5.36%
• DSCR: 0.76
• 1% rule: 0.61%
• Cash to close: $52,920

Investor read

• This is a 3-bed/1.5-bath single-family listed at $189k.
• At list price, monthly cash flow is $-237 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $147k (22.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $116k (38.5% below list).
• It's been on market 46 days — a 3% lower offer ($183k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $116k (38.5% below list) — sets the bar for 1% rule.
• In year one you build about $7k of equity ($1k loan paydown + $6k appreciation (3.0% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Cherokee ISD (rural): math 45% / reading 50% proficiency, ranked #459 of 1,141 in TX (top 40%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 8 active listings in the ZIP.
• San Saba County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 4y ago; this cycle's ask has dropped $10k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 5, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 46 days. Have you received any prior offers? Is the seller open to a 39% concession, seller financing, or rate buy-down credit?
• Built in 1961 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.