7812 E Magnolia St

Houston, TX 77012

$186,000B-

4 bd · 2.0 ba · 2,067 sqft · Built 1928 · SingleFamily · Active · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,200/mo
• Mortgage (P&I): −$975
• Tax + insurance: −$304
• HOA: −$0
• Vac / Maint / Mgmt: −$462
• Net cashflow: $459/mo
• Annual: $5,509/yr
• Cap rate: 9.25%
• Cash-on-cash: 10.58%
• DSCR: 1.47
• 1% rule: 1.18%
• Cash to close: $52,080

Investor read

• This is a 4-bed/2.0-bath single-family listed at $186k.
• At list price, monthly cash flow is $459 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $186k).
• It's been on market 28 days — a 2% lower offer ($183k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $183k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-2.1%/yr); year-one equity from $1k 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.
• 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: Deady Middle (math 8% / reading 21%, grade F, #1,583 of 1,662 statewide, top 96%, 588 students, 96% FRL); Milby H S (math 28% / reading 38%, grade F, #1,023 of 1,632 statewide, top 63%, 2,107 students, 93% 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 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 74 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• At projected returns (-2.1% appreciation + 3.0% rent growth), your $52k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.3% vs local median 3.1% 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

• Built in 1928 — 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.