304 Lockwood Dr

Houston, TX 77011

$299,000D

None bd · None ba · 1,885 sqft · Built 1935 · Other · Active · 128 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,452/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$1,015
• HOA: −$0
• Vac / Maint / Mgmt: −$515
• Net cashflow: $-646/mo
• Annual: $-7,752/yr
• Cap rate: 3.70%
• Cash-on-cash: -9.26%
• DSCR: 0.59
• 1% rule: 0.82%
• Cash to close: $83,720

Investor read

• This is a other listed at $299k.
• At list price, monthly cash flow is $-646 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $214k (28.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $245k (18.0% below list).
• It's been on market 128 days — a 12% lower offer ($263k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $214k (28.5% below list) — sets the bar for cash-flow.
• In year one you build about $32k of equity ($2k loan paydown + $30k 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.
• Watch-outs: property tax is 3.6% of price; built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-2.9%/yr); 161 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals leasing fast (median 9d on market — plan ~1-2 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.
• 7 sale attempts since 20y ago; this cycle's ask is 17488% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $88k; list at $299k implies a 240% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$51k 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 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $2,452/mo this rent would consume 59% of the median local household income ($50k/yr) (locally 655% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 128 days. Have you received any prior offers? Is the seller open to a 29% concession, seller financing, or rate buy-down credit?
• Built in 1935 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?