7575 Katy Fwy

Houston, TX 77024

$175,000D+

2 bd · 1.0 ba · 898 sqft · Built 1972 · MultiFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,340/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$358
• HOA: −$0
• Vac / Maint / Mgmt: −$281
• Net cashflow: $-217/mo
• Annual: $-2,603/yr
• Cap rate: 5.26%
• Cash-on-cash: -3.68%
• DSCR: 0.84
• 1% rule: 0.77%
• Cash to close: $49,000

Investor read

• This is a 2-bed/1.0-bath multifamily listed at $175k. Condition is rated good.
• At list price, monthly cash flow is $-217 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (17.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $134k (23.4% below list).
• It's been on market 21 days — a 2% lower offer ($172k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $134k (23.4% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($1k loan paydown + $12k appreciation (6.9% 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.
• Spring Branch ISD (urban): math 47% / reading 46% proficiency, ranked #215 of 826 in TX (top 26%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hunters Creek El (math 76% / reading 66%, grade A-, #128 of 4,322 statewide, top 3%, 604 students, 18% FRL); Spring Branch Middle (math 55% / reading 49%, grade C+, #301 of 1,662 statewide, top 19%, 1,074 students, 39% FRL); Memorial H S (math 73% / reading 85%, grade A-, #50 of 1,632 statewide, top 3%, 2,555 students, 16% FRL) — zoned schools average 24% FRL vs 54% district-wide (30 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 67% at this address vs 46% district-wide (+21 pts) — the actual schools serving this property are materially stronger than the Spring Branch ISD average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising fast (+5.0%/yr); 313 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 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.
• 2 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• By year 3, paydown + projected appreciation supports a ~$33k 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→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.3% vs local median 3.2% in Houston — 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?
• Built in 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.