902 Essex Dr

Friendswood, TX 77546

$272,000C-

5 bd · 2.5 ba · 2,321 sqft · Built 1981 · SingleFamily · Pending · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,693/mo
• Mortgage (P&I): −$1,426
• Tax + insurance: −$776
• HOA: −$2
• Vac / Maint / Mgmt: −$565
• Net cashflow: $-78/mo
• Annual: $-932/yr
• Cap rate: 5.95%
• Cash-on-cash: -1.22%
• DSCR: 0.95
• 1% rule: 0.99%
• Cash to close: $76,160

Investor read

• This is a 5-bed/2.5-bath single-family listed at $272k.
• At list price, monthly cash flow is $-78 ($-932/yr) — negative.
• To cash-flow at today's rent, offer at most $258k (5.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $269k (1.0% below list).
• It's been on market 42 days — a 3% lower offer ($264k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $258k (5.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#338 in TX) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Friendswood ISD (suburban): math 64% / reading 65% proficiency, ranked #15 of 826 in TX (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Zoned schools: C W Cline El (math 62% / reading 67%, grade B, #257 of 4,322 statewide, top 6%, 801 students, 8% FRL); Friendswood J H (math 62% / reading 59%, grade B+, #154 of 1,662 statewide, top 9%, 1,467 students, 0% FRL); Friendswood H S (math 61% / reading 76%, grade B, #144 of 1,632 statewide, top 9%, 1,980 students, 0% FRL).
• Watch-outs: property tax is 2.9% of price.
• Market conditions: Rents rising (+2.7%/yr); 512 active listings in the ZIP; high-income renter base; 3,258 units permitted in Galveston County in 2024 (0 in 5+ unit buildings).
• Galveston County population projected at +43% 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 6→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 2.4% in Friendswood — 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.

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 42 days. Have you received any prior offers? Is the seller open to a 5% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.