Santa Cruz Plan

Porter, TX 77365

$274,990D-

4 bd · 2.5 ba · 1,851 sqft · Built — · SingleFamily · Active · 1096 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,163/mo
• Mortgage (P&I): −$1,445
• Tax + insurance: −$459
• HOA: −$0
• Vac / Maint / Mgmt: −$454
• Net cashflow: $-196/mo
• Annual: $-2,348/yr
• Cap rate: 5.44%
• Cash-on-cash: -3.04%
• DSCR: 0.86
• 1% rule: 0.78%
• Cash to close: $77,169

Investor read

• This is a 4-bed/2.5-bath single-family listed at $275k. Condition is rated excellent.
• At list price, monthly cash flow is $-196 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $247k (10.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $216k (21.3% below list).
• It's been on market 1096 days — a 12% lower offer ($242k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $216k (21.3% 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: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• New Caney ISD (suburban): math 31% / reading 32% proficiency, ranked #570 of 826 in TX (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+1.6%/yr); 1540 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals lingering (median 101d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 73% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 2.8% in Porter — 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.

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 1096 days. Have you received any prior offers? Is the seller open to a 21% 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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.