505 S Church Ave

Mount Pleasant, TX 75455

$160,000B-

3 bd · 2.0 ba · 1,257 sqft · Built 1971 · SingleFamily · Pending · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,781/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$260
• HOA: −$0
• Vac / Maint / Mgmt: −$374
• Net cashflow: $308/mo
• Annual: $3,690/yr
• Cap rate: 8.60%
• Cash-on-cash: 8.24%
• DSCR: 1.37
• 1% rule: 1.11%
• Cash to close: $44,800

Investor read

• This is a 3-bed/2.0-bath single-family listed at $160k.
• At list price, monthly cash flow is $308 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $160k).
• It's been on market 30 days — a 2% lower offer ($158k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $158k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#81 in TX, #2,808 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, schools D-, amenities D-.
• Mount Pleasant ISD (town): math 45% / reading 44% proficiency, ranked #291 of 826 in TX (top 35%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 382 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); 47 units permitted in Titus County in 2024 (10 in 5+ unit buildings).
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.6% vs local median 3.5% in Mount Pleasant — 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.
• This rent runs 38% of the median local income ($56k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1971 — 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.
• 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?
• 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.