1310 Lorraine St

Houston, TX 77009

$450,000C+

5 bd · 1.0 ba · 4,066 sqft · Built 1945 · MultiFamily · Active · 525 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,505/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$750
• HOA: −$0
• Vac / Maint / Mgmt: −$1,576
• Net cashflow: $2,819/mo
• Annual: $33,829/yr
• Cap rate: 13.81%
• Cash-on-cash: 26.85%
• DSCR: 2.19
• 1% rule: 1.67%
• Cash to close: $126,000

Investor read

• This is a 5-bed/1.0-bath multifamily listed at $450k.
• At list price, monthly cash flow is $3k ($34k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $450k).
• It's been on market 525 days — a 12% lower offer ($396k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $396k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k 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: 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.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 595 active listings in the ZIP; solid renter incomes; 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.
• 6 sale attempts since 19y 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.
• At projected returns (-3.0% appreciation + 0.8% rent growth), your $126k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.8% 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 $7,505/mo this rent would consume 108% of the median local household income ($83k/yr) (locally 994% 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 525 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1945 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.