Kitson Plan

Splendora, TX 77328

$216,990F

3 bd · 2.0 ba · 1,409 sqft · Built — · SingleFamily · Active · 106 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,745/mo
• Mortgage (P&I): −$1,444
• Tax + insurance: −$459
• HOA: −$0
• Vac / Maint / Mgmt: −$367
• Net cashflow: $-523/mo
• Annual: $-6,281/yr
• Cap rate: 4.01%
• Cash-on-cash: -8.15%
• DSCR: 0.64
• 1% rule: 0.63%
• Cash to close: $77,076

Investor read

• This is a 3-bed/2.0-bath single-family listed at $217k. Condition is rated good.
• At list price, monthly cash flow is $-523 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $200k (8.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $175k (19.6% below list).
• It's been on market 106 days — a 9% lower offer ($197k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $175k (19.6% 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 62/100 on livability (#911 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Splendora ISD (rural): math 25% / reading 31% proficiency, ranked #648 of 826 in TX (top 78%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Greenleaf El (math 28% / reading 25%, grade F, #2,927 of 4,322 statewide, top 68%, 797 students, 70% FRL); Splendora J H (math 28% / reading 42%, grade F, #842 of 1,662 statewide, top 51%, 774 students, 62% FRL); Splendora H S (math 18% / reading 38%, grade F, #1,170 of 1,632 statewide, top 72%, 1,344 students, 59% FRL).
• Market conditions: 464 active listings in the ZIP; 35 comparable units currently listed for rent nearby; rentals lingering (median 50d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; 13,259 units permitted in Montgomery County in 2024 (1,402 in 5+ unit buildings).
• Montgomery County population projected at +65% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 4.0% vs local median 5.2% in Splendora — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 34% of the median local income ($62k/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 106 days. Have you received any prior offers? Is the seller open to a 20% 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• 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.