4040 Sun Burst Ln

Katy, TX 77493

$334,990D

4 bd · 2.5 ba · 2,168 sqft · Built 2025 · SingleFamily · Active · 358 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,440/mo
• Mortgage (P&I): −$1,757
• Tax + insurance: −$558
• HOA: −$0
• Vac / Maint / Mgmt: −$512
• Net cashflow: $-388/mo
• Annual: $-4,654/yr
• Cap rate: 4.90%
• Cash-on-cash: -4.96%
• DSCR: 0.78
• 1% rule: 0.73%
• Cash to close: $93,797

Investor read

• This is a 4-bed/2.5-bath single-family listed at $335k. Condition is rated good.
• At list price, monthly cash flow is $-388 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $279k (16.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $244k (27.2% below list).
• It's been on market 358 days — a 12% lower offer ($295k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $244k (27.2% 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 $10k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#111 in TX, #3,613 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities D, commute F.
• Royal ISD (rural): math 23% / reading 23% proficiency, ranked #744 of 826 in TX (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Royal El (math 27% / reading 20%, grade F, #3,247 of 4,322 statewide, top 76%, 762 students, 78% FRL); Royal J H (math 22% / reading 23%, grade F, #1,341 of 1,662 statewide, top 82%, 593 students, 73% FRL); Royal H S (math 17% / reading 26%, grade F, #1,377 of 1,632 statewide, top 85%, 842 students, 71% FRL) — zoned schools at 74% FRL track the district average.
• Market conditions: Rents soft (-0.8%/yr); 4013 active listings in the ZIP; high-income renter base; 483 units permitted in Waller County in 2024 (89 in 5+ unit buildings).
• Waller County population projected at +62% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $28k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• 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 4.9% vs local median 3.5% in Katy — 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 358 days. Have you received any prior offers? Is the seller open to a 27% 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.