2012 Yates St

Houston, TX 77020

$385,000F

3 bd · 3.5 ba · 2,000 sqft · Built 2026 · Land · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,480/mo
• Mortgage (P&I): −$3,122
• Tax + insurance: −$992
• HOA: −$0
• Vac / Maint / Mgmt: −$521
• Net cashflow: $-2,155/mo
• Annual: $-25,864/yr
• Cap rate: 1.95%
• Cash-on-cash: -15.51%
• DSCR: 0.31
• 1% rule: 0.42%
• Cash to close: $166,710

Investor read

• This is a 3-bed/3.5-bath land listed at $385k.
• At list price, monthly cash flow is $-2k ($-26k/yr) — negative.
• To cash-flow at today's rent, offer at most $333k (13.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $248k (35.6% below list).
• It's been on market 22 days — a 2% lower offer ($379k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $248k (35.6% below list) — sets the bar for 1% rule.
• In year one you build about $64k of equity ($4k loan paydown + $60k appreciation (10.0% local appreciation)).
• 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: 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.
• Zoned schools: Fleming Middle (math 10% / reading 15%, grade F, #1,616 of 1,662 statewide, top 97%, 384 students, 97% FRL); Wheatley H S (math 17% / reading 19%, grade F, #1,445 of 1,632 statewide, top 89%, 643 students, 95% FRL) — zoned schools average 96% FRL vs 71% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 15% at this address vs 31% district-wide (-16 pts) — the specific schools serving this property underperform the Houston ISD average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising fast (+4.3%/yr); 337 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 7 sale attempts; this cycle's ask is 4% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• By year 2, paydown + projected appreciation supports a ~$102k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 1.9% vs local median 3.2% in Houston — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $2,480/mo this rent would consume 59% of the median local household income ($50k/yr) (locally 969% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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?
• 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.