407 Rosebank Rnch

Magnolia, TX 77354

$237,000D

4 bd · 2.0 ba · 1,319 sqft · Built 2021 · SingleFamily · Pending · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,014/mo
• Mortgage (P&I): −$1,243
• Tax + insurance: −$675
• HOA: −$40
• Vac / Maint / Mgmt: −$423
• Net cashflow: $-367/mo
• Annual: $-4,408/yr
• Cap rate: 4.77%
• Cash-on-cash: -5.44%
• DSCR: 0.76
• 1% rule: 0.85%
• Cash to close: $66,360

Investor read

• This is a 4-bed/2.0-bath single-family listed at $237k. Condition is rated good.
• At list price, monthly cash flow is $-367 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $172k (27.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $201k (15.0% below list).
• It's been on market 21 days — a 2% lower offer ($233k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $172k (27.4% below list) — sets the bar for cash-flow.
• In year one you build about $25k of equity ($2k loan paydown + $24k 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: 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.
• Zoned schools: Willie E Williams El (math 46% / reading 41%, grade F, #1,269 of 4,322 statewide, top 30%, 869 students, 70% FRL); Magnolia J H (math 35% / reading 37%, grade F, #805 of 1,662 statewide, top 50%, 1,103 students, 57% FRL); Magnolia H S (math 47% / reading 62%, grade C-, #379 of 1,632 statewide, top 26%, 2,248 students, 31% FRL).
• Watch-outs: property tax is 2.6% of price; flood insurance adds $66/mo.
• Market conditions: Rents flat; 1622 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 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.
• 5 sale attempts since 5y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• By year 2, paydown + projected appreciation supports a ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.8% 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?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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.