5707 Trafalgar Dr

Houston, TX 77085

$199,500D

3 bd · 2.0 ba · 1,305 sqft · Built 1960 · SingleFamily · Pending · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,777/mo
• Mortgage (P&I): −$1,046
• Tax + insurance: −$434
• HOA: −$0
• Vac / Maint / Mgmt: −$373
• Net cashflow: $-76/mo
• Annual: $-916/yr
• Cap rate: 5.83%
• Cash-on-cash: -1.64%
• DSCR: 0.93
• 1% rule: 0.89%
• Cash to close: $55,860

Investor read

• This is a 3-bed/2.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-76 ($-916/yr) — negative.
• To cash-flow at today's rent, offer at most $186k (6.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $178k (10.9% below list).
• It's been on market 15 days — a 2% lower offer ($197k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $178k (10.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-1.2%/yr); year-one equity from $1k of loan paydown is wiped out by about $2k 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: Windsor Village El (math 37% / reading 37%, grade F, #1,769 of 4,322 statewide, top 44%, 657 students, 98% FRL); Lawson Middle (math 21% / reading 27%, grade F, #1,301 of 1,662 statewide, top 79%, 1,274 students, 96% FRL); Madison H S (math 9% / reading 17%, grade F, #1,537 of 1,632 statewide, top 94%, 1,924 students, 93% FRL) — zoned schools average 96% FRL vs 71% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+1.5%/yr); 37 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% 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.
• This rent runs 31% of the median local income ($68k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Built in 1960 — 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?
• 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.
• 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.