3205 Illinois St

Baytown, TX 77520

$299,000C

4 bd · 4.0 ba · 2,448 sqft · Built 1928 · MultiFamily · Pending · 188 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,483/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$565
• HOA: −$0
• Vac / Maint / Mgmt: −$731
• Net cashflow: $619/mo
• Annual: $7,425/yr
• Cap rate: 9.04%
• Cash-on-cash: 9.82%
• DSCR: 1.44
• 1% rule: 1.16%
• Cash to close: $83,720

Investor read

• This is a 4 × 1-bed/1.0-bath units multifamily listed at $299k. Condition is rated fair.
• At list price, monthly cash flow is $619 ($7k/yr) — positive. Per door: $155/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $299k).
• It's been on market 188 days — a 12% lower offer ($263k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $263k (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 $9k 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: schools D+, employment D+, crime 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.
• Watch-outs: flood insurance adds $66/mo; built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.3%/yr); 271 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.
• 5 sale attempts since 4y ago; this cycle's ask has dropped $30k (9%) 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 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.0% 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 $3,483/mo this rent would consume 77% of the median local household income ($54k/yr) (locally 1559% 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 188 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1928 — 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.

Repairs flagged (vision-AI assessment)

• Major: kitchen — No kitchen visible, cannot assess
• Major: bathrooms — No bathrooms visible, cannot assess
• Major: roof — No roof visible, cannot assess
• Major: exterior — No exterior visible, cannot assess
• Major: windows — No windows visible, cannot assess
• Major: HVAC/mechanicals — No HVAC/mechanicals visible, cannot assess