5506 Beverlyhill St #8

Houston, TX 77056

$1,250,000D

None bd · None ba · 4,480 sqft · Built 1960 · MultiFamily · Pending · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $11,341/mo
• Mortgage (P&I): −$6,555
• Tax + insurance: −$2,088
• HOA: −$0
• Vac / Maint / Mgmt: −$2,382
• Net cashflow: $316/mo
• Annual: $3,793/yr
• Cap rate: 6.60%
• Cash-on-cash: 1.08%
• DSCR: 1.05
• 1% rule: 0.91%
• Cash to close: $350,000

Investor read

• This is a 8 × 2-bed/2-bath units multifamily listed at $1.25M.
• At list price, monthly cash flow is $316 ($4k/yr) — positive. Per door: $40/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.13M (9.3% below list).
• It's been on market 42 days — a 3% lower offer ($1.21M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.13M (9.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $38k 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: School At St George Place (math 34% / reading 46%, grade F, #1,514 of 4,322 statewide, top 36%, 782 students, 55% FRL); Tanglewood Middle (math 29% / reading 42%, grade F, #827 of 1,662 statewide, top 51%, 808 students, 62% FRL); Wisdom H S (math 17% / reading 16%, grade F, #1,497 of 1,632 statewide, top 92%, 2,260 students, 97% FRL) — zoned schools at 71% FRL track the district average.
• Market conditions: Rents soft (-1.7%/yr); 321 active listings in the ZIP; 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.
• 8 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.
• Climate carrying-cost: major 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 6.6% 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.
• At $11,341/mo this rent would consume 146% of the median local household income ($93k/yr) (locally 2132% 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 42 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• 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?
• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?