7319 Palmetto Ln

Baytown, TX 77521

$239,000D

3 bd · 2.0 ba · 1,460 sqft · Built 1979 · SingleFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,122/mo
• Mortgage (P&I): −$1,253
• Tax + insurance: −$375
• HOA: −$8
• Vac / Maint / Mgmt: −$446
• Net cashflow: $40/mo
• Annual: $480/yr
• Cap rate: 6.49%
• Cash-on-cash: 0.72%
• DSCR: 1.03
• 1% rule: 0.89%
• Cash to close: $66,920

Investor read

• This is a 3-bed/2.0-bath single-family listed at $239k.
• At list price, monthly cash flow is $40 ($480/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 $212k (11.2% below list).
• It's been on market 23 days — a 2% lower offer ($235k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $212k (11.2% 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 $7k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#412 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, crime F, amenities F.
• Goose Creek CISD (urban): math 37% / reading 36% proficiency, ranked #473 of 826 in TX (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Clark El (math 37% / reading 47%, grade F, #1,335 of 4,322 statewide, top 33%, 683 students, 63% FRL); E F Green Junior School (1,020 students, 67% FRL); High Point School (12 students, 75% FRL).
• Market conditions: Rents rising (+1.5%/yr); 624 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); 629 units permitted in Chambers County in 2024 (0 in 5+ unit buildings).
• Chambers County population projected at +46% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: moderate flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 4.2% in Baytown — 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.
• This rent runs 35% of the median local income ($74k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1979 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.