Somerset Plan

Katy, TX 77494

$425,990B

4 bd · 3.0 ba · 2,572 sqft · Built — · MultiFamily · Active · 302 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,823/mo
• Mortgage (P&I): −$2,082
• Tax + insurance: −$662
• HOA: −$0
• Vac / Maint / Mgmt: −$1,223
• Net cashflow: $1,856/mo
• Annual: $22,270/yr
• Cap rate: 11.90%
• Cash-on-cash: 20.03%
• DSCR: 1.89
• 1% rule: 1.47%
• Cash to close: $111,190

Investor read

• This is a 4-bed/3.0-bath multifamily listed at $426k. Condition is rated good.
• At list price, monthly cash flow is $2k ($22k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $426k).
• It's been on market 302 days — a 12% lower offer ($375k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $375k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#111 in TX, #3,613 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities D, commute F.
• Lamar CISD (suburban): math 50% / reading 53% proficiency, ranked #116 of 826 in TX (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents falling (-3.5%/yr); 1036 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 12,093 units permitted in Fort Bend County in 2024 (815 in 5+ unit buildings).
• Fort Bend County population projected at +75% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts 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.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $111k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 11.9% vs local median 3.0% in Katy — 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 $5,823/mo this rent would consume 47% of the median local household income ($149k/yr) (locally 3390% 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 302 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.