3019 Falls At Fairdale

Houston, TX 77057

$405,000D+

3 bd · 3.5 ba · 2,754 sqft · Built 2007 · SingleFamily · Pending · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,942/mo
• Mortgage (P&I): −$2,124
• Tax + insurance: −$799
• HOA: −$300
• Vac / Maint / Mgmt: −$828
• Net cashflow: $-108/mo
• Annual: $-1,301/yr
• Cap rate: 5.97%
• Cash-on-cash: -1.15%
• DSCR: 0.95
• 1% rule: 0.97%
• Cash to close: $113,400

Investor read

• This is a 3-bed/3.5-bath single-family listed at $405k.
• At list price, monthly cash flow is $-108 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $386k (4.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $394k (2.7% below list).
• It's been on market 33 days — a 3% lower offer ($393k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $386k (4.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-1.2%/yr); year-one equity from $3k of loan paydown is wiped out by about $5k 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.
• 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: Pilgrim Academy (math 21% / reading 25%, grade F, #3,277 of 4,322 statewide, top 77%, 1,233 students, 96% FRL); Tanglewood Middle (math 29% / reading 42%, grade F, #827 of 1,662 statewide, top 51%, 808 students, 62% FRL); Wisdom H S (math 17% / reading 16%, grade F, #1,497 of 1,632 statewide, top 92%, 2,260 students, 97% FRL).
• Market conditions: Rents soft (-1.8%/yr); 393 active listings in the ZIP; 21 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 52% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 13 sale attempts since 20y ago; this cycle's ask has dropped $23k (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→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% 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 $3,942/mo this rent would consume 71% of the median local household income ($67k/yr) (locally 3533% 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?
• It's been on market 33 days. Have you received any prior offers? Is the seller open to a 5% 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?
• 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.