22014 Sovereign Heights Ln

Houston, TX 77073

$264,950F

4 bd · 2.5 ba · 1,937 sqft · Built 2022 · SingleFamily · Active · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,220/mo
• Mortgage (P&I): −$1,389
• Tax + insurance: −$682
• HOA: −$35
• Vac / Maint / Mgmt: −$466
• Net cashflow: $-352/mo
• Annual: $-4,227/yr
• Cap rate: 4.70%
• Cash-on-cash: -5.70%
• DSCR: 0.75
• 1% rule: 0.84%
• Cash to close: $74,186

Investor read

• This is a 4-bed/2.5-bath single-family listed at $265k.
• At list price, monthly cash flow is $-352 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $203k (23.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $222k (16.2% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $203k (23.5% below list) — sets the bar for cash-flow.
• In year one you build about $36 of equity ($2k loan paydown + $-2k appreciation (-0.7% 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.
• Spring ISD (suburban): math 19% / reading 26% proficiency, ranked #730 of 826 in TX (top 88%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Carolee Booker Elementary (math 24% / reading 23%, grade F, #3,247 of 4,322 statewide, top 76%, 765 students, 91% FRL); Rickey C Bailey Middle (math 15% / reading 23%, grade F, #1,466 of 1,662 statewide, top 89%, 1,065 students, 85% FRL); Spring H S (math 12% / reading 21%, grade F, #1,497 of 1,632 statewide, top 92%, 2,760 students, 72% FRL) — zoned schools average 83% FRL vs 66% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.6% of price.
• Market conditions: Rents flat; 162 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• 3 sale attempts since 3y 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: 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 4.7% 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 34% of the median local income ($79k/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?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.