12500 Melville Dr Unit 345D

Montgomery, TX 77356

$199,000D+

2 bd · 3.0 ba · 1,360 sqft · Built 1978 · Condo · Active · 109 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,752/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$332
• HOA: −$96
• Vac / Maint / Mgmt: −$368
• Net cashflow: $-87/mo
• Annual: $-1,047/yr
• Cap rate: 5.77%
• Cash-on-cash: -1.88%
• DSCR: 0.92
• 1% rule: 0.88%
• Cash to close: $55,720

Investor read

• This is a 2-bed/3.0-bath condo listed at $199k. Condition is rated good.
• At list price, monthly cash flow is $-87 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $186k (6.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $175k (12.0% below list).
• It's been on market 109 days — a 9% lower offer ($181k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $175k (12.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#372 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Montgomery ISD (rural): math 63% / reading 57% proficiency, ranked #49 of 826 in TX (top 6%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Madeley Ranch El (math 59% / reading 55%, grade C+, #505 of 4,322 statewide, top 13%, 786 students, 26% FRL); Montgomery J H (math 68% / reading 54%, grade B+, #145 of 1,662 statewide, top 9%, 1,045 students, 30% FRL); Montgomery H S (math 53% / reading 62%, grade C, #327 of 1,632 statewide, top 20%, 1,556 students, 25% FRL) — zoned schools at 27% FRL track the district average.
• Market conditions: Rents falling (-3.3%/yr); 1304 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals lingering (median 64d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 73% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 13,259 units permitted in Montgomery County in 2024 (1,402 in 5+ unit buildings).
• Montgomery County population projected at +65% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% vs local median 2.5% in Montgomery — 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.

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 109 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?