3412 Lantern Ln

Baytown, TX 77521

$280,000C

7 bd · 5.0 ba · 3,412 sqft · Built 1973 · MultiFamily · Active · 318 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,248/mo
• Mortgage (P&I): −$1,468
• Tax + insurance: −$664
• HOA: −$0
• Vac / Maint / Mgmt: −$682
• Net cashflow: $433/mo
• Annual: $5,200/yr
• Cap rate: 8.43%
• Cash-on-cash: 7.65%
• DSCR: 1.34
• 1% rule: 1.16%
• Cash to close: $78,400

Investor read

• This is a 7-bed/5.0-bath multifamily listed at $280k.
• At list price, monthly cash flow is $433 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $280k).
• It's been on market 318 days — a 12% lower offer ($246k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $246k (12.0% 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 69/100 on livability (#412 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, crime F, amenities F.
• Goose Creek CISD (urban): math 37% / reading 36% proficiency, ranked #473 of 826 in TX (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Harlem El (math 28% / reading 31%, grade F, #2,525 of 4,322 statewide, top 62%, 667 students, 90% FRL); Baytown J H (math 35% / reading 29%, grade F, #971 of 1,662 statewide, top 60%, 743 students, 83% FRL); Sterling H S (math 53% / reading 44%, grade D, #560 of 1,632 statewide, top 35%, 2,098 students, 69% FRL) — zoned schools average 81% FRL vs 61% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising (+1.5%/yr); 624 active listings in the ZIP; 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.
• 10 sale attempts since 15y ago; this cycle's ask has dropped $60k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: severe flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 6→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 4.2% in Baytown — 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.
• At $3,248/mo this rent would consume 53% of the median local household income ($74k/yr) (locally 2121% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 318 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.