438 Havard Rd #2

Houston, TX 77336

$167,000D+

1 bd · 1.0 ba · 1,040 sqft · Built 1977 · SingleFamily · Pending · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,420/mo
• Mortgage (P&I): −$876
• Tax + insurance: −$341
• HOA: −$0
• Vac / Maint / Mgmt: −$298
• Net cashflow: $-95/mo
• Annual: $-1,135/yr
• Cap rate: 6.09%
• Cash-on-cash: -0.72%
• DSCR: 0.97
• 1% rule: 0.85%
• Cash to close: $46,760

Investor read

• This is a 1-bed/1.0-bath single-family listed at $167k.
• At list price, monthly cash flow is $-95 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $150k (10.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $142k (14.9% below list).
• It's been on market 70 days — a 6% lower offer ($157k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $142k (14.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k 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.
• Huffman ISD (rural): math 32% / reading 35% proficiency, ranked #500 of 826 in TX (top 60%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 585 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.
• Climate carrying-cost: severe 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 6.1% 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 is only 18% of the median local income ($96k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 70 days. Have you received any prior offers? Is the seller open to a 15% concession, seller financing, or rate buy-down credit?
• Built in 1977 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?