789 Fortune St Unit A-B

Houston, TX 77088

$419,750B

6 bd · 6.0 ba · 2,656 sqft · Built 2026 · MultiFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,871/mo
• Mortgage (P&I): −$1,166
• Tax + insurance: −$370
• HOA: −$0
• Vac / Maint / Mgmt: −$813
• Net cashflow: $1,522/mo
• Annual: $18,263/yr
• Cap rate: 14.51%
• Cash-on-cash: 29.34%
• DSCR: 2.31
• 1% rule: 1.74%
• Cash to close: $62,242

Investor read

• This is a 2 × 3-bed/3.0-bath units multifamily listed at $420k. Condition is rated good.
• At list price, monthly cash flow is $2k ($18k/yr) — positive. Per door: $761/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $387k (7.8% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $387k (7.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k 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: Osborne El (math 12% / reading 12%, grade F, #4,207 of 4,322 statewide, top 98%, 315 students, 99% FRL); Williams Middle (math 9% / reading 15%, grade F, #1,623 of 1,662 statewide, top 98%, 411 students, 98% FRL); Washington B T H S (math 27% / reading 25%, grade F, #1,234 of 1,632 statewide, top 76%, 878 students, 96% FRL) — zoned schools average 98% FRL vs 71% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 17% at this address vs 31% district-wide (-14 pts) — the specific schools serving this property underperform the Houston ISD average; the district grade overstates school quality for this exact location.
• Market conditions: Rents soft (-1.0%/yr); 471 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.
• 2 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 $62k cash investment doubles in ~5 years — after that, you're playing with house money.
• 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.
• Cap rate 14.5% 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.
• At $3,871/mo this rent would consume 85% of the median local household income ($54k/yr) (locally 2294% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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 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.