The Carlsbad (345) Plan

Houston, TX 77484

$258,040D-

4 bd · 2.0 ba · 1,557 sqft · Built — · SingleFamily · Active · 158 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,111/mo
• Mortgage (P&I): −$1,433
• Tax + insurance: −$455
• HOA: −$0
• Vac / Maint / Mgmt: −$443
• Net cashflow: $-220/mo
• Annual: $-2,642/yr
• Cap rate: 5.33%
• Cash-on-cash: -3.45%
• DSCR: 0.85
• 1% rule: 0.77%
• Cash to close: $76,488

Investor read

• This is a 4-bed/2.0-bath single-family listed at $258k. Condition is rated good.
• At list price, monthly cash flow is $-220 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $241k (6.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $211k (18.2% below list).
• It's been on market 158 days — a 12% lower offer ($227k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $211k (18.2% below list) — sets the bar for 1% rule.
• 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: schools D, crime F.
• Waller ISD (rural): math 30% / reading 35% proficiency, ranked #532 of 826 in TX (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents falling (-3.8%/yr); 1183 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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: severe wind risk, 99% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.3% 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.
• This rent runs 31% of the median local income ($81k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 158 days. Have you received any prior offers? Is the seller open to a 18% 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 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.