40839 Mostyn Hill Dr

Magnolia, TX 77354

$233,000D+

3 bd · 2.0 ba · 1,510 sqft · Built 2019 · SingleFamily · Active · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,066/mo
• Mortgage (P&I): −$1,222
• Tax + insurance: −$698
• HOA: −$67
• Vac / Maint / Mgmt: −$434
• Net cashflow: $-355/mo
• Annual: $-4,258/yr
• Cap rate: 4.47%
• Cash-on-cash: -6.53%
• DSCR: 0.71
• 1% rule: 0.89%
• Cash to close: $65,240

Investor read

• This is a 3-bed/2.0-bath single-family listed at $233k.
• At list price, monthly cash flow is $-355 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $170k (26.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $207k (11.3% below list).
• It's been on market 61 days — a 6% lower offer ($219k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $170k (26.9% below list) — sets the bar for cash-flow.
• In year one you build about $25k of equity ($2k loan paydown + $23k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#222 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools D+, amenities F, commute F.
• Magnolia ISD (rural): math 42% / reading 45% proficiency, ranked #247 of 826 in TX (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 3.1% of price.
• Market conditions: Rents flat; 1604 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 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.
• 3 sale attempts since 7y ago; this cycle's ask has dropped $14k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 2, paydown + projected appreciation supports a ~$40k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.5% vs local median 3.4% in Magnolia — 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 61 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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?