4013 Falls St

Houston, TX 77026

$2,200C-

6 bd · 4.0 ba · 2,451 sqft · Built 2024 · MultiFamily · Active · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,341/mo
• Mortgage (P&I): −$12
• Tax + insurance: −$430
• HOA: −$0
• Vac / Maint / Mgmt: −$492
• Net cashflow: $1,408/mo
• Annual: $16,892/yr
• Cap rate: 1006.76%
• Cash-on-cash: 3573.09%
• DSCR: 159.98
• 1% rule: 106.41%
• Cash to close: $616

Investor read

• This is a 2 × 3-bed/3.0-bath units multifamily listed at $2k.
• At list price, monthly cash flow is $1k ($17k/yr) — positive. Per door: $704/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $2k).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $101 of equity ($15 loan paydown + $86 appreciation (3.9% 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: Dogan El (math 13% / reading 22%, grade F, #3,805 of 4,322 statewide, top 89%, 511 students, 99% FRL); Fleming Middle (math 10% / reading 15%, grade F, #1,616 of 1,662 statewide, top 97%, 384 students, 97% FRL); Wheatley H S (math 17% / reading 19%, grade F, #1,445 of 1,632 statewide, top 89%, 643 students, 95% FRL) — zoned schools average 97% FRL vs 71% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 16% at this address vs 31% district-wide (-15 pts) — the specific schools serving this property underperform the Houston ISD average; the district grade overstates school quality for this exact location.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: Rents rising (+3.1%/yr); 448 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.
• 9 sale attempts since 10y 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.
• At projected returns (3.9% appreciation + 3.1% rent growth), your $616 cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); 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 1006.8% 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 $2,341/mo this rent would consume 72% of the median local household income ($39k/yr) (locally 1531% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.