26398 Cedar Sedge Dr

Magnolia, TX 77355

$289,710D

4 bd · 2.5 ba · 2,218 sqft · Built 2026 · Land · Pending · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,211/mo
• Mortgage (P&I): −$1,519
• Tax + insurance: −$214
• HOA: −$54
• Vac / Maint / Mgmt: −$464
• Net cashflow: $-40/mo
• Annual: $-485/yr
• Cap rate: 6.13%
• Cash-on-cash: -0.60%
• DSCR: 0.97
• 1% rule: 0.76%
• Cash to close: $81,119

Investor read

• This is a 4-bed/2.5-bath land listed at $290k.
• At list price, monthly cash flow is $-40 ($-485/yr) — negative.
• To cash-flow at today's rent, offer at most $283k (2.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $221k (23.7% below list).
• It's been on market 55 days — a 3% lower offer ($281k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $221k (23.7% 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 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.
• Tomball ISD (suburban): math 66% / reading 63% proficiency, ranked #25 of 826 in TX (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Decker Prairie El (math 29% / reading 34%, grade F, #2,396 of 4,322 statewide, top 56%, 755 students, 40% FRL); Grand Lakes J H (969 students, 29% FRL); Tomball H S (math 74% / reading 69%, grade B+, #111 of 1,632 statewide, top 7%, 2,801 students, 34% FRL).
• Zoned-school proficiency averages 52% at this address vs 64% district-wide (-13 pts) — the specific schools serving this property underperform the Tomball ISD average; the district grade overstates school quality for this exact location.
• Market conditions: 556 active listings in the ZIP; solid renter incomes; 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.
• Cap rate 6.1% 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?
• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• 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.
• 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.