5023 Royal Regiment Ln

Houston, TX 77493

$269,900D-

3 bd · 2.0 ba · 1,656 sqft · Built 2018 · SingleFamily · Pending · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,414/mo
• Mortgage (P&I): −$1,415
• Tax + insurance: −$790
• HOA: −$79
• Vac / Maint / Mgmt: −$507
• Net cashflow: $-378/mo
• Annual: $-4,535/yr
• Cap rate: 4.61%
• Cash-on-cash: -6.00%
• DSCR: 0.73
• 1% rule: 0.89%
• Cash to close: $75,572

Investor read

• This is a 3-bed/2.0-bath single-family listed at $270k.
• At list price, monthly cash flow is $-378 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $203k (24.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $241k (10.6% below list).
• It's been on market 33 days — a 3% lower offer ($262k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $203k (24.7% 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 $8k 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.
• 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: Robert King El (math 41% / reading 44%, grade F, #1,313 of 4,322 statewide, top 31%, 981 students, 68% FRL); Stockdick J H (math 41% / reading 51%, grade D+, #462 of 1,662 statewide, top 28%, 1,313 students, 55% FRL); Katy H S (math 62% / reading 74%, grade B, #150 of 1,632 statewide, top 10%, 3,330 students, 38% FRL) — zoned schools average 54% FRL vs 27% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 3.0% of price.
• Market conditions: Rents soft (-0.8%/yr); 2729 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 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.
• 3 sale attempts since 8y 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: moderate flood risk; 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 4.6% vs local median 3.1% 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 33 days. Have you received any prior offers? Is the seller open to a 25% 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?