9802 Freestone St

Houston, TX 77034

$129,900D+

2 bd · 1.0 ba · 1,070 sqft · Built 1946 · SingleFamily · Pending · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,242/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$340
• HOA: −$0
• Vac / Maint / Mgmt: −$261
• Net cashflow: $-40/mo
• Annual: $-478/yr
• Cap rate: 5.93%
• Cash-on-cash: -1.31%
• DSCR: 0.94
• 1% rule: 0.96%
• Cash to close: $36,372

Investor read

• This is a 2-bed/1.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $-40 ($-478/yr) — negative.
• To cash-flow at today's rent, offer at most $123k (5.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $124k (4.4% below list).
• It's been on market 29 days — a 2% lower offer ($128k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (5.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $898 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• 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.
• 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: Fred Roberts Middle (math 36% / reading 32%, grade F, #892 of 1,662 statewide, top 55%, 545 students, 80% FRL).
• Watch-outs: property tax is 2.6% of price; built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.4%/yr); 93 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• Climate carrying-cost: 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 5.9% vs local median 3.2% in Houston — 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?
• Built in 1946 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.