5817 Downing St

Houston, TX 77020

$800,000B+

2 bd · 2.0 ba · 648 sqft · Built 1940 · MultiFamily · Active · 119 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $16,330/mo
• Mortgage (P&I): −$4,195
• Tax + insurance: −$1,060
• HOA: −$0
• Vac / Maint / Mgmt: −$3,429
• Net cashflow: $7,646/mo
• Annual: $91,746/yr
• Cap rate: 17.86%
• Cash-on-cash: 41.31%
• DSCR: 2.84
• 1% rule: 2.04%
• Cash to close: $224,000

Investor read

• This is a 2-bed/2.0-bath multifamily listed at $800k.
• At list price, monthly cash flow is $8k ($92k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($16k rent vs $800k).
• It's been on market 119 days — a 9% lower offer ($728k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $728k (9.0% below list) — sets the bar for market timing.
• In year one you build about $86k of equity ($6k loan paydown + $80k appreciation (10.0% 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: Mcreynolds Middle (math 10% / reading 17%, grade F, #1,602 of 1,662 statewide, top 97%, 398 students, 98% FRL); Wheatley H S (math 17% / reading 19%, grade F, #1,445 of 1,632 statewide, top 89%, 643 students, 95% FRL) — zoned schools average 97% FRL vs 71% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 16% at this address vs 31% district-wide (-15 pts) — the specific schools serving this property underperform the Houston ISD average; the district grade overstates school quality for this exact location.
• Watch-outs: flood insurance adds $66/mo; built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.3%/yr); 337 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 5 sale attempts since 13y ago; this cycle's ask has dropped $75k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 4.3% rent growth), your $224k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$137k 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→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 119 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1940 — 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?
• 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 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?
• 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.