425 Elaine Valley Dr

Katy, TX 77493

$300,000D+

5 bd · 2.5 ba · 2,586 sqft · Built 2022 · SingleFamily · Active · 123 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,176/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$844
• HOA: −$33
• Vac / Maint / Mgmt: −$667
• Net cashflow: $59/mo
• Annual: $709/yr
• Cap rate: 6.53%
• Cash-on-cash: 0.84%
• DSCR: 1.04
• 1% rule: 1.06%
• Cash to close: $84,000

Investor read

• This is a 5-bed/2.5-bath single-family listed at $300k. Condition is rated good.
• At list price, monthly cash flow is $59 ($709/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $300k).
• It's been on market 123 days — a 12% lower offer ($264k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $264k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#111 in TX, #3,613 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities D, commute F.
• Royal ISD (rural): math 23% / reading 23% proficiency, ranked #744 of 826 in TX (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 2.9% of price.
• Market conditions: Rents soft (-0.8%/yr); 2696 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 483 units permitted in Waller County in 2024 (89 in 5+ unit buildings).
• Waller County population projected at +62% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 18 sale attempts since 4y ago; this cycle's ask has dropped $35k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: moderate flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 3.0% in Katy — 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 32% of the median local income ($118k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 123 days. Have you received any prior offers? Is the seller open to a 12% 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?
• 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 B-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?
• 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.