5206 Polly St

Houston, TX 77016

$55,000B+

2 bd · 1.0 ba · 1,264 sqft · Built 1950 · SingleFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,635/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$135
• HOA: −$0
• Vac / Maint / Mgmt: −$343
• Net cashflow: $868/mo
• Annual: $10,410/yr
• Cap rate: 25.22%
• Cash-on-cash: 67.60%
• DSCR: 4.01
• 1% rule: 2.97%
• Cash to close: $15,400

Investor read

• This is a 2-bed/1.0-bath single-family listed at $55k.
• At list price, monthly cash flow is $868 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $55k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $5k of equity ($380 loan paydown + $5k appreciation (8.7% 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: 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: Shadydale El (math 11% / reading 20%, grade F, #3,990 of 4,322 statewide, top 93%, 631 students, 95% FRL); Forest Brook Middle (math 12% / reading 14%, grade F, #1,609 of 1,662 statewide, top 97%, 613 students, 98% FRL); North Forest H S (math 13% / reading 18%, grade F, #1,505 of 1,632 statewide, top 92%, 974 students, 97% FRL) — zoned schools average 97% FRL vs 71% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 15% at this address vs 31% district-wide (-16 pts) — the specific schools serving this property underperform the Houston ISD average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 376 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); 67% 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.
• At projected returns (8.7% appreciation + 0.4% rent growth), your $15k cash investment doubles in ~1 year — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 25.2% 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.
• This rent runs 41% of the median local income ($48k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.