4122 Mallow St Unit A

Houston, TX 77051

$540,999D+

8 bd · 6.0 ba · 3,688 sqft · Built 2021 · MultiFamily · Active · 535 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,724/mo
• Mortgage (P&I): −$2,837
• Tax + insurance: −$1,111
• HOA: −$0
• Vac / Maint / Mgmt: −$992
• Net cashflow: $-216/mo
• Annual: $-2,592/yr
• Cap rate: 5.81%
• Cash-on-cash: -1.71%
• DSCR: 0.92
• 1% rule: 0.87%
• Cash to close: $151,480

Investor read

• This is a 2 × 4-bed/3.0-bath units multifamily listed at $541k.
• At list price, monthly cash flow is $-216 ($-3k/yr) — negative. Per door: $-108/mo.
• To cash-flow at today's rent, offer at most $503k (7.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $472k (12.7% below list).
• It's been on market 535 days — a 12% lower offer ($476k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $472k (12.7% below list) — sets the bar for 1% rule.
• In year one you build about $58k of equity ($4k loan paydown + $54k appreciation (10.0% 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: schools D, 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.
• Market conditions: Rents rising fast (+4.8%/yr); 315 active listings in the ZIP; lower-income renter base — watch delinquency; 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.
• By year 2, paydown + projected appreciation supports a ~$93k 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 5.8% vs local median 3.1% 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 $4,724/mo this rent would consume 152% of the median local household income ($37k/yr) (locally 1446% 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 535 days. Have you received any prior offers? Is the seller open to a 13% 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?
• 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 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?