11123 Gatesden Dr

Houston, TX 77377

$264,990D

3 bd · 2.5 ba · 2,460 sqft · Built 1985 · SingleFamily · Active · 89 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,343/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$628
• HOA: −$21
• Vac / Maint / Mgmt: −$492
• Net cashflow: $-187/mo
• Annual: $-2,248/yr
• Cap rate: 5.44%
• Cash-on-cash: -3.03%
• DSCR: 0.87
• 1% rule: 0.88%
• Cash to close: $74,197

Investor read

• This is a 3-bed/2.5-bath single-family listed at $265k.
• At list price, monthly cash flow is $-187 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $232k (12.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $234k (11.6% below list).
• It's been on market 89 days — a 6% lower offer ($249k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $232k (12.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k 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: crime F.
• Tomball ISD (suburban): math 66% / reading 63% proficiency, ranked #25 of 826 in TX (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Lakewood El (math 56% / reading 55%, grade C, #587 of 4,322 statewide, top 14%, 788 students, 30% FRL); Willow Wood J H (math 72% / reading 67%, grade A, #63 of 1,662 statewide, top 4%, 834 students, 31% FRL); Tomball H S (math 74% / reading 69%, grade B+, #111 of 1,632 statewide, top 7%, 2,801 students, 34% FRL).
• Market conditions: Rents soft (-0.7%/yr); 730 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 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.
• 6 sale attempts since 25y ago; this cycle's ask has dropped $15k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: 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.
• Cap rate 5.4% 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.

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 89 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?