5212 Sherman St

Houston, TX 77011

$324,000D-

3 bd · 2.5 ba · 1,721 sqft · Built 2022 · SingleFamily · Active · 328 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,149/mo
• Mortgage (P&I): −$1,699
• Tax + insurance: −$794
• HOA: −$0
• Vac / Maint / Mgmt: −$451
• Net cashflow: $-796/mo
• Annual: $-9,550/yr
• Cap rate: 3.35%
• Cash-on-cash: -10.53%
• DSCR: 0.53
• 1% rule: 0.66%
• Cash to close: $90,720

Investor read

• This is a 3-bed/2.5-bath single-family listed at $324k.
• At list price, monthly cash flow is $-796 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $183k (43.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $215k (33.7% below list).
• It's been on market 328 days — a 12% lower offer ($285k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $183k (43.4% below list) — sets the bar for cash-flow.
• In year one you build about $35k of equity ($2k loan paydown + $32k 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: 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.
• Market conditions: Rents soft (-2.9%/yr); 161 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals leasing fast (median 9d on market — plan ~1-2 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.
• 2 sale attempts; this cycle's ask has dropped $25k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 2, paydown + projected appreciation supports a ~$56k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: 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.
• At $2,149/mo this rent would consume 51% of the median local household income ($50k/yr) (locally 655% 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?
• It's been on market 328 days. Have you received any prior offers? Is the seller open to a 43% concession, seller financing, or rate buy-down credit?
• 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?
• 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.