2777 Clinton Dr

Houston, TX 77020

$416,900D-

3 bd · 3.5 ba · 1,900 sqft · Built 2021 · SingleFamily · Pending · 62 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,626/mo
• Mortgage (P&I): −$2,186
• Tax + insurance: −$964
• HOA: −$183
• Vac / Maint / Mgmt: −$551
• Net cashflow: $-1,259/mo
• Annual: $-15,106/yr
• Cap rate: 2.86%
• Cash-on-cash: -12.26%
• DSCR: 0.45
• 1% rule: 0.63%
• Cash to close: $116,732

Investor read

• This is a 3-bed/3.5-bath single-family listed at $417k.
• At list price, monthly cash flow is $-1k ($-15k/yr) — negative.
• To cash-flow at today's rent, offer at most $195k (53.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $263k (37.0% below list).
• It's been on market 62 days — a 6% lower offer ($392k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $195k (53.3% below list) — sets the bar for cash-flow.
• In year one you build about $45k of equity ($3k loan paydown + $42k appreciation (10.0% 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: schools D, 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.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising fast (+4.3%/yr); 337 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); 42% 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.
• By year 2, paydown + projected appreciation supports a ~$72k 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.
• At $2,626/mo this rent would consume 63% of the median local household income ($50k/yr) (locally 969% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 62 days. Have you received any prior offers? Is the seller open to a 53% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?