26038 Palmdale Estate Dr

Houston, TX 77406

$339,000D-

4 bd · 3.0 ba · 2,598 sqft · Built 2005 · SingleFamily · Active · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,685/mo
• Mortgage (P&I): −$1,778
• Tax + insurance: −$859
• HOA: −$81
• Vac / Maint / Mgmt: −$564
• Net cashflow: $-596/mo
• Annual: $-7,150/yr
• Cap rate: 4.18%
• Cash-on-cash: -7.53%
• DSCR: 0.66
• 1% rule: 0.79%
• Cash to close: $94,920

Investor read

• This is a 4-bed/3.0-bath single-family listed at $339k.
• At list price, monthly cash flow is $-596 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $234k (31.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $269k (20.8% below list).
• It's been on market 31 days — a 3% lower offer ($329k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $234k (31.0% 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 $10k 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.
• Lamar CISD (suburban): math 50% / reading 53% proficiency, ranked #116 of 826 in TX (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 2.5% of price.
• Market conditions: Rents soft (-1.6%/yr); 1222 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 12,093 units permitted in Fort Bend County in 2024 (815 in 5+ unit buildings).
• Fort Bend County population projected at +75% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 9y ago; this cycle's ask is 13737% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.2% 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 31 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?