1809 Mills St

Houston, TX 77026

$479,990F

3 bd · 3.5 ba · 2,204 sqft · Built 2024 · Land · Pending

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,603/mo
• Mortgage (P&I): −$2,517
• Tax + insurance: −$393
• HOA: −$100
• Vac / Maint / Mgmt: −$337
• Net cashflow: $-1,743/mo
• Annual: $-20,921/yr
• Cap rate: 1.93%
• Cash-on-cash: -15.57%
• DSCR: 0.31
• 1% rule: 0.33%
• Cash to close: $134,397

Investor read

• This is a 3-bed/3.5-bath land listed at $480k.
• At list price, monthly cash flow is $-2k ($-21k/yr) — negative.
• To cash-flow at today's rent, offer at most $172k (64.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $160k (66.6% below list).
• Only 0 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $160k (66.6% below list) — sets the bar for 1% rule.
• In year one you build about $22k of equity ($3k loan paydown + $19k appreciation (3.9% local appreciation)).
• Location reads 74/100 on livability (#184 in TX, #4,771 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: crime F.
• Houston ISD (urban): math 27% / reading 35% proficiency, ranked #593 of 826 in TX (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 71% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Marshall Middle (math 14% / reading 22%, grade F, #1,491 of 1,662 statewide, top 91%, 607 students, 97% FRL); Northside H S (math 15% / reading 26%, grade F, #1,389 of 1,632 statewide, top 86%, 1,168 students, 94% FRL) — zoned schools average 95% FRL vs 71% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.1%/yr); 445 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 29,883 units permitted in Harris County in 2024 (8,621 in 5+ unit buildings).
• Harris County population projected at +47% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; 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 1.9% vs local median 3.1% in Houston — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $1,603/mo this rent would consume 49% of the median local household income ($39k/yr) (locally 1531% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.