5109 Earline St St

Houston, TX 77016

$255,000D-

2 bd · 1.0 ba · 740 sqft · Built 1960 · MultiFamily · Active · 463 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,170/mo
• Mortgage (P&I): −$1,337
• Tax + insurance: −$415
• HOA: −$0
• Vac / Maint / Mgmt: −$246
• Net cashflow: $-828/mo
• Annual: $-9,933/yr
• Cap rate: 2.40%
• Cash-on-cash: -13.91%
• DSCR: 0.38
• 1% rule: 0.46%
• Cash to close: $71,400

Investor read

• This is a 2-bed/1.0-bath multifamily listed at $255k. Condition is rated good.
• At list price, monthly cash flow is $-828 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $109k (57.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $117k (54.1% below list).
• It's been on market 463 days — a 12% lower offer ($224k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $109k (57.3% below list) — sets the bar for cash-flow.
• In year one you build about $24k of equity ($2k loan paydown + $22k appreciation (8.7% 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: Cook Jr El (math 22% / reading 37%, grade F, #2,525 of 4,322 statewide, top 62%, 519 students, 96% FRL); Key Middle (math 10% / reading 20%, grade F, #1,569 of 1,662 statewide, top 95%, 615 students, 100% FRL); Kashmere H S (math 14% / reading 22%, grade F, #1,445 of 1,632 statewide, top 89%, 725 students, 96% FRL) — zoned schools average 97% FRL vs 71% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 539 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 60d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 68% 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.
• 5 sale attempts since 24y ago; this cycle's ask is 20300% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $16k; list at $255k implies a 1494% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$38k 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; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.4% vs local median 3.1% in Houston — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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?
• It's been on market 463 days. Have you received any prior offers? Is the seller open to a 57% concession, seller financing, or rate buy-down credit?
• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?