5712 Downing St

Houston, TX 77020

$225,000C

3 bd · 2.5 ba · 1,309 sqft · Built 2026 · SingleFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,983/mo
• Mortgage (P&I): −$1,141
• Tax + insurance: −$363
• HOA: −$0
• Vac / Maint / Mgmt: −$416
• Net cashflow: $63/mo
• Annual: $757/yr
• Cap rate: 6.64%
• Cash-on-cash: 1.24%
• DSCR: 1.06
• 1% rule: 0.91%
• Cash to close: $60,912

Investor read

• This is a 3-bed/2.5-bath single-family listed at $225k. Condition is rated excellent.
• At list price, monthly cash flow is $63 ($757/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $198k (11.9% below list).
• It's been on market 17 days — a 2% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $198k (11.9% below list) — sets the bar for 1% rule.
• In year one you build about $23k of equity ($2k loan paydown + $22k 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: Fonwood Early Childhood Ctr (450 students, 100% FRL); 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 98% 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.
• Market conditions: Rents rising fast (+4.3%/yr); 339 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 53% 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 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.
• At projected returns (10.0% appreciation + 4.3% rent growth), your $61k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 6.6% 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.
• At $1,983/mo this rent would consume 47% of the median local household income ($50k/yr) (locally 969% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.