The Cardinal II Plan

Fairchilds, TX 77461

$245,990F

3 bd · 2.0 ba · 1,566 sqft · Built — · SingleFamily · Active · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,200/mo
• Mortgage (P&I): −$1,544
• Tax + insurance: −$557
• HOA: −$0
• Vac / Maint / Mgmt: −$462
• Net cashflow: $-363/mo
• Annual: $-4,357/yr
• Cap rate: 5.08%
• Cash-on-cash: -4.32%
• DSCR: 0.81
• 1% rule: 0.75%
• Cash to close: $82,434

Investor read

• This is a 3-bed/2.0-bath single-family listed at $246k. Condition is rated good.
• At list price, monthly cash flow is $-363 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $242k (1.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $220k (10.6% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $220k (10.6% 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 $9k of value loss. Plan a longer hold.
• Location reads 52/100 on livability (#1,450 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+; Watch: crime D, schools F, amenities F.
• Needville ISD (rural): math 55% / reading 55% proficiency, ranked #95 of 826 in TX (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 337 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 12,093 units permitted in Fort Bend County in 2024 (815 in 5+ unit buildings).
• Fort Bend County population projected at +75% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major flood risk; 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 5.1% vs local median 3.2% in Fairchilds — 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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 D 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.