Plan Preston Plan

Katy, TX 77493

$397,990F

4 bd · 2.0 ba · 1,939 sqft · Built — · SingleFamily · Active · 114 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,432/mo
• Mortgage (P&I): −$2,464
• Tax + insurance: −$783
• HOA: −$0
• Vac / Maint / Mgmt: −$511
• Net cashflow: $-1,326/mo
• Annual: $-15,911/yr
• Cap rate: 2.91%
• Cash-on-cash: -12.09%
• DSCR: 0.46
• 1% rule: 0.52%
• Cash to close: $131,572

Investor read

• This is a 4-bed/2.0-bath single-family listed at $398k. Condition is rated excellent.
• At list price, monthly cash flow is $-1k ($-16k/yr) — negative.
• To cash-flow at today's rent, offer at most $278k (30.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $243k (38.9% below list).
• It's been on market 114 days — a 9% lower offer ($362k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $243k (38.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#111 in TX, #3,613 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities D, commute F.
• Katy ISD (suburban): math 61% / reading 63% proficiency, ranked #29 of 826 in TX (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Katy El (math 63% / reading 61%, grade B, #321 of 4,322 statewide, top 8%, 682 students, 26% FRL); Katy J H (math 52% / reading 51%, grade C, #318 of 1,662 statewide, top 20%, 1,094 students, 53% FRL); Katy H S (math 62% / reading 74%, grade B, #150 of 1,632 statewide, top 10%, 3,330 students, 38% FRL).
• Market conditions: Rents soft (-0.8%/yr); 4013 active listings in the ZIP; high-income renter base; 483 units permitted in Waller County in 2024 (89 in 5+ unit buildings).
• Waller County population projected at +62% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 114 days. Have you received any prior offers? Is the seller open to a 39% concession, seller financing, or rate buy-down credit?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.