1806 Potomac Dr Unit C

Houston, TX 77057

$460,000D+

3 bd · 2.5 ba · 2,986 sqft · Built 1981 · Townhouse · Pending · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,109/mo
• Mortgage (P&I): −$2,412
• Tax + insurance: −$971
• HOA: −$30
• Vac / Maint / Mgmt: −$863
• Net cashflow: $-168/mo
• Annual: $-2,012/yr
• Cap rate: 5.86%
• Cash-on-cash: -1.56%
• DSCR: 0.93
• 1% rule: 0.89%
• Cash to close: $128,800

Investor read

• This is a 3-bed/2.5-bath townhouse listed at $460k.
• At list price, monthly cash flow is $-168 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $430k (6.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $411k (10.7% below list).
• It's been on market 31 days — a 3% lower offer ($446k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $411k (10.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-1.2%/yr); year-one equity from $3k of loan paydown is wiped out by about $6k 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: Briargrove El (math 33% / reading 42%, grade F, #1,744 of 4,322 statewide, top 41%, 836 students, 56% FRL); Tanglewood Middle (math 29% / reading 42%, grade F, #827 of 1,662 statewide, top 51%, 808 students, 62% FRL); Wisdom H S (math 17% / reading 16%, grade F, #1,497 of 1,632 statewide, top 92%, 2,260 students, 97% FRL) — zoned schools at 71% FRL track the district average.
• Market conditions: Rents soft (-1.8%/yr); 392 active listings in the ZIP; 18 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% 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.
• 3 sale attempts since 10y ago 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.
• Climate carrying-cost: 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 5.9% 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 $4,109/mo this rent would consume 74% of the median local household income ($67k/yr) (locally 3533% 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 31 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.