Condo & Townhome Financing in Waco, TX

Condo & Townhome investing in Waco

Condos and townhomes are the lowest-basis way into the Waco rental market, and the trade is that a second set of underwriting rules applies to the building, not just to you. Every DSCR condo file in Texas runs a project review: owner-occupancy ratio, investor concentration, HOA delinquency rate, reserve funding, and any pending litigation or special assessment.

At the Waco median of $285,000, a condo or townhome prices near $205,200, roughly a quarter under the detached median. Minimum down is 20% ($41,040), leaving a loan of $164,160. Estimated all-in PITIA runs about $1,803 per month, and that figure already carries an HOA allowance of $240/month — HOA dues count in the DSCR denominator, which is exactly why condo files that look cheap on price often ratio worse than a detached comp.

Returns and structure

Return metrics at the Waco median for this product: an estimated cap rate of 5.80%, and monthly cash flow of $203 negative at 20% down. Negative cash flow at the minimum down payment is common in appreciation-led markets; investors close the gap with a larger down payment, a purchase below median, an added unit, or a rate buydown.