3012 Garrow St

Houston, TX 77003

$420,000D

3 bd · 1.0 ba · 2,031 sqft · Built 1940 · SingleFamily · Active · 159 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,143/mo
• Mortgage (P&I): −$2,203
• Tax + insurance: −$470
• HOA: −$0
• Vac / Maint / Mgmt: −$660
• Net cashflow: $-189/mo
• Annual: $-2,270/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.93%
• DSCR: 0.91
• 1% rule: 0.75%
• Cash to close: $117,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $420k.
• At list price, monthly cash flow is $-189 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $387k (8.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $314k (25.2% below list).
• It's been on market 159 days — a 12% lower offer ($370k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $314k (25.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k 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: schools D, 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.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.6%/yr); 206 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• Climate carrying-cost: 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 5.8% 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 45% of the median local income ($84k/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 159 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?