2016 Main St Ph 6

Houston, TX 77002

$399,900D

4 bd · 2.5 ba · 4,021 sqft · Built 1965 · Condo · Active · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,688/mo
• Mortgage (P&I): −$2,097
• Tax + insurance: −$1,158
• HOA: −$4,683
• Vac / Maint / Mgmt: −$1,405
• Net cashflow: $-2,655/mo
• Annual: $-31,858/yr
• Cap rate: -1.47%
• Cash-on-cash: -27.74%
• DSCR: -0.23
• 1% rule: 1.67%
• Cash to close: $111,972

Investor read

• This is a 4-bed/2.5-bath condo listed at $400k.
• At list price, monthly cash flow is $-3k ($-32k/yr) — negative.
• To cash-flow at today's rent, offer at most $77k (80.7% below list).
• Meets the 1% rule at list price ($7k rent vs $400k).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $77k (80.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-0.7%/yr); year-one equity from $3k 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: property tax is 2.8% of price; flood insurance adds $66/mo; HOA is 70% of rent.
• Market conditions: Rents soft (-2.0%/yr); 106 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 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.
• 7 sale attempts since 22y 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→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate -1.5% vs local median 3.1% in Houston — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $6,688/mo this rent would consume 93% of the median local household income ($86k/yr) (locally 1116% 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?
• Built in 1965 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?