305 Johnson St

Pasadena, TX 77506

$270,000D

3 bd · 3.0 ba · 1,500 sqft · Built 1945 · MultiFamily · Active · 47 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,705/mo
• Mortgage (P&I): −$1,416
• Tax + insurance: −$435
• HOA: −$0
• Vac / Maint / Mgmt: −$568
• Net cashflow: $286/mo
• Annual: $3,427/yr
• Cap rate: 7.56%
• Cash-on-cash: 4.53%
• DSCR: 1.20
• 1% rule: 1.00%
• Cash to close: $75,600

Investor read

• This is a 3 × 2-bed/1.0-bath units multifamily listed at $270k.
• At list price, monthly cash flow is $286 ($3k/yr) — positive. Per door: $95/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $270k).
• It's been on market 47 days — a 3% lower offer ($262k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $262k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#600 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, crime F, amenities F.
• Pasadena ISD (suburban): math 29% / reading 32% proficiency, ranked #612 of 826 in TX (top 74%) — 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: Kruse El (math 17% / reading 17%, grade F, #3,836 of 4,322 statewide, top 91%, 446 students, 97% FRL); De Zavala Middle (math 17% / reading 23%, grade F, #1,428 of 1,662 statewide, top 87%, 563 students, 96% FRL); Pasadena H S (math 41% / reading 31%, grade F, #930 of 1,632 statewide, top 57%, 2,221 students, 90% FRL) — zoned schools average 94% FRL vs 71% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 104 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 43% 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.
• 6 sale attempts since 5y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• 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 7.6% vs local median 3.5% in Pasadena — 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

• It's been on market 47 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1945 — 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?
• 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?