Somerset Plan

Sienna, TX 77459

$403,990B+

4 bd · 3.0 ba · 2,572 sqft · Built — · MultiFamily · Active · 369 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,348/mo
• Mortgage (P&I): −$2,119
• Tax + insurance: −$673
• HOA: −$0
• Vac / Maint / Mgmt: −$1,333
• Net cashflow: $2,223/mo
• Annual: $26,676/yr
• Cap rate: 12.90%
• Cash-on-cash: 23.58%
• DSCR: 2.05
• 1% rule: 1.57%
• Cash to close: $113,117

Investor read

• This is a 4-bed/3.0-bath multifamily listed at $404k. Condition is rated good.
• At list price, monthly cash flow is $2k ($27k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $404k).
• It's been on market 369 days — a 12% lower offer ($356k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $356k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-1.7%/yr); year-one equity from $3k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Fort Bend ISD (suburban): math 44% / reading 53% proficiency, ranked #140 of 826 in TX (top 17%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents soft (-0.1%/yr); 1215 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 12,093 units permitted in Fort Bend County in 2024 (815 in 5+ unit buildings).
• Fort Bend County population projected at +75% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $23k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-1.7% appreciation + 0.0% rent growth), your $113k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.9% vs local median 3.3% in Sienna — 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 $6,348/mo this rent would consume 59% of the median local household income ($129k/yr) (locally 1004% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 369 days. Have you received any prior offers? Is the seller open to a 12% 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.
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.