3125 Illinois St

Baytown, TX 77520

$319,000C

3 bd · 2.0 ba · 1,288 sqft · Built 1928 · MultiFamily · Active · 209 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,580/mo
• Mortgage (P&I): −$1,673
• Tax + insurance: −$639
• HOA: −$0
• Vac / Maint / Mgmt: −$752
• Net cashflow: $517/mo
• Annual: $6,202/yr
• Cap rate: 8.49%
• Cash-on-cash: 7.84%
• DSCR: 1.35
• 1% rule: 1.12%
• Cash to close: $89,320

Investor read

• This is a 4 × 1-bed/?-bath units multifamily listed at $319k.
• At list price, monthly cash flow is $517 ($6k/yr) — positive. Per door: $129/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $319k).
• It's been on market 209 days — a 12% lower offer ($281k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $281k (12.0% below list) — sets the bar for market timing.
• 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 69/100 on livability (#412 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, crime F, amenities F.
• Goose Creek CISD (urban): math 37% / reading 36% proficiency, ranked #473 of 826 in TX (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: San Jacinto El (math 32% / reading 27%, grade F, #2,525 of 4,322 statewide, top 62%, 657 students, 91% FRL); Baytown J H (math 35% / reading 29%, grade F, #971 of 1,662 statewide, top 60%, 743 students, 83% FRL); Lee H S (math 32% / reading 31%, grade F, #1,073 of 1,632 statewide, top 66%, 1,845 students, 81% FRL) — zoned schools average 85% FRL vs 61% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $66/mo; built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.3%/yr); 274 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 8d 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.
• 12 sale attempts since 5y 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→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.5% vs local median 4.2% in Baytown — 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 $3,580/mo this rent would consume 79% of the median local household income ($54k/yr) (locally 1559% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 209 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1928 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?