5342 Leeland St

Houston, TX 77023

$450,000C-

4 bd · None ba · 2,574 sqft · Built 1940 · MultiFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,396/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$750
• HOA: −$0
• Vac / Maint / Mgmt: −$923
• Net cashflow: $363/mo
• Annual: $4,356/yr
• Cap rate: 7.26%
• Cash-on-cash: 3.46%
• DSCR: 1.15
• 1% rule: 0.98%
• Cash to close: $126,000

Investor read

• This is a 4-bed/?-bath multifamily listed at $450k.
• At list price, monthly cash flow is $363 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $440k (2.3% below list).
• It's been on market 17 days — a 2% lower offer ($443k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $440k (2.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k 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: 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: Carrillo El (math 25% / reading 35%, grade F, #2,500 of 4,322 statewide, top 58%, 358 students, 87% FRL); Navarro Middle (math 8% / reading 13%, grade F, #1,639 of 1,662 statewide, top 99%, 547 students, 98% FRL); Austin H S (math 9% / reading 18%, grade F, #1,530 of 1,632 statewide, top 94%, 1,448 students, 97% FRL) — zoned schools average 94% FRL vs 71% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 18% at this address vs 31% district-wide (-13 pts) — the specific schools serving this property underperform the Houston ISD average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.4%/yr); 170 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 8 sale attempts since 18y ago; this cycle's ask has dropped $49k (10%) 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→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.3% 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.
• At $4,396/mo this rent would consume 103% of the median local household income ($51k/yr) (locally 1311% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.