4121 Mallow St Unit A/B

Houston, TX 77051

$444,900B-

4 bd · 3.0 ba · 3,968 sqft · Built 2007 · MultiFamily · Active · 81 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,430/mo
• Mortgage (P&I): −$2,333
• Tax + insurance: −$742
• HOA: −$0
• Vac / Maint / Mgmt: −$930
• Net cashflow: $425/mo
• Annual: $5,101/yr
• Cap rate: 7.44%
• Cash-on-cash: 4.09%
• DSCR: 1.18
• 1% rule: 1.00%
• Cash to close: $124,572

Investor read

• This is a 2 × 2-bed/1.5-bath units multifamily listed at $445k.
• At list price, monthly cash flow is $425 ($5k/yr) — positive. Per door: $213/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $443k (0.4% below list).
• It's been on market 81 days — a 6% lower offer ($418k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $418k (6.0% below list) — sets the bar for market timing.
• In year one you build about $48k of equity ($3k loan paydown + $44k 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); 312 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.
• 4 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 (10.0% appreciation + 4.8% rent growth), your $125k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$76k 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 6→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.4% 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 $4,430/mo this rent would consume 142% 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

• It's been on market 81 days. Have you received any prior offers? Is the seller open to a 6% 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?
• 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.