8157 Tate St Unit A & B

Houston, TX 77028

$450,000D-

6 bd · 4.0 ba · 2,180 sqft · Built 2023 · MultiFamily · Coming Soon · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,656/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$750
• HOA: −$0
• Vac / Maint / Mgmt: −$768
• Net cashflow: $-222/mo
• Annual: $-2,659/yr
• Cap rate: 5.70%
• Cash-on-cash: -2.11%
• DSCR: 0.91
• 1% rule: 0.81%
• Cash to close: $126,000

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $450k. Condition is rated good.
• At list price, monthly cash flow is $-222 ($-3k/yr) — negative. Per door: $-111/mo.
• To cash-flow at today's rent, offer at most $418k (7.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $366k (18.8% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $366k (18.8% below list) — sets the bar for 1% rule.
• In year one you build about $27k of equity ($3k loan paydown + $24k appreciation (5.2% 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: Elmore El (math 12% / reading 14%, grade F, #4,152 of 4,322 statewide, top 96%, 532 students, 99% FRL); Key Middle (math 10% / reading 20%, grade F, #1,569 of 1,662 statewide, top 95%, 615 students, 100% FRL); Kashmere H S (math 14% / reading 22%, grade F, #1,445 of 1,632 statewide, top 89%, 725 students, 96% FRL) — zoned schools average 98% FRL vs 71% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 15% at this address vs 31% district-wide (-16 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 soft (-1.6%/yr); 355 active listings in the ZIP; lower-income renter base — watch delinquency; 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.
• By year 2, paydown + projected appreciation supports a ~$43k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• 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 5.7% 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 $3,656/mo this rent would consume 114% of the median local household income ($38k/yr) (locally 1177% 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?
• 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?
• 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?
• 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.