12119 Lemon Ridge Ln #121

Houston, TX 77035

$99,000C

2 bd · 2.0 ba · 1,244 sqft · Built 1980 · Townhouse · Active · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,154/mo
• Mortgage (P&I): −$519
• Tax + insurance: −$290
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $102/mo
• Annual: $1,228/yr
• Cap rate: 7.53%
• Cash-on-cash: 4.43%
• DSCR: 1.20
• 1% rule: 1.17%
• Cash to close: $27,720

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $99k.
• At list price, monthly cash flow is $102 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $99k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $684 of loan paydown is wiped out by about $3k 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: Fondren Middle (math 13% / reading 20%, grade F, #1,536 of 1,662 statewide, top 93%, 840 students, 99% FRL); Westbury H S (math 19% / reading 31%, grade F, #1,250 of 1,632 statewide, top 77%, 2,243 students, 92% FRL) — zoned schools average 95% FRL vs 71% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 3.0% of price.
• Market conditions: Rents flat; 199 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 48% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 7 sale attempts since 10y ago; this cycle's ask has dropped $6k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.5% 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.

Questions for listing agent

• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.