7980 Grove Ridge Dr

Houston, TX 77061

$84,900D

2 bd · 1.5 ba · 1,122 sqft · Built 1972 · Townhouse · Pending · 40 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,191/mo
• Mortgage (P&I): −$445
• Tax + insurance: −$185
• HOA: −$440
• Vac / Maint / Mgmt: −$250
• Net cashflow: $-129/mo
• Annual: $-1,545/yr
• Cap rate: 4.47%
• Cash-on-cash: -6.50%
• DSCR: 0.71
• 1% rule: 1.40%
• Cash to close: $23,772

Investor read

• This is a 2-bed/1.5-bath townhouse listed at $85k.
• At list price, monthly cash flow is $-129 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $62k (26.8% below list).
• Meets the 1% rule at list price ($1k rent vs $85k).
• It's been on market 40 days — a 3% lower offer ($82k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $62k (26.8% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $587 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• 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: schools D, 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.
• Watch-outs: HOA is 37% of rent.
• Market conditions: Rents soft (-0.3%/yr); 50 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 42% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 4 sale attempts since 3y ago 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.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.5% vs local median 3.1% 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.
• This rent runs 32% of the median local income ($45k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 40 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1972 — 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?
• 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?