2701 Westheimer Rd Unit 5GH

Houston, TX 77098

$690,000F

3 bd · 3.0 ba · 2,108 sqft · Built 1963 · Condo · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,528/mo
• Mortgage (P&I): −$3,618
• Tax + insurance: −$1,150
• HOA: −$2,682
• Vac / Maint / Mgmt: −$951
• Net cashflow: $-3,874/mo
• Annual: $-46,485/yr
• Cap rate: -0.44%
• Cash-on-cash: -24.06%
• DSCR: -0.07
• 1% rule: 0.66%
• Cash to close: $193,200

Investor read

• This is a 3-bed/3.0-bath condo listed at $690k. Condition is rated good.
• At list price, monthly cash flow is $-4k ($-46k/yr) — negative.
• To cash-flow at today's rent, offer at most $129k (81.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $453k (34.4% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $129k (81.2% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k 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: Poe El (math 52% / reading 61%, grade C+, #559 of 4,322 statewide, top 13%, 790 students, 34% FRL); Lanier Middle (math 73% / reading 82%, grade A+, #27 of 1,662 statewide, top 2%, 1,434 students, 29% FRL); Lamar H S (math 38% / reading 65%, grade D+, #478 of 1,632 statewide, top 29%, 3,125 students, 49% FRL) — zoned schools average 37% FRL vs 71% district-wide (34 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 62% at this address vs 31% district-wide (+31 pts) — the actual schools serving this property are materially stronger than the Houston ISD average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: HOA is 59% of rent.
• Market conditions: Rents soft (-1.1%/yr); 200 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 35d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate -0.4% vs local median 3.1% in Houston — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $4,528/mo this rent would consume 47% of the median local household income ($117k/yr) — 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?
• Built in 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?