1613 Palcio Real Dr

Houston, TX 77047

$244,900D+

3 bd · 2.5 ba · 2,124 sqft · Built 2006 · SingleFamily · Active · 67 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,501/mo
• Mortgage (P&I): −$1,284
• Tax + insurance: −$700
• HOA: −$77
• Vac / Maint / Mgmt: −$525
• Net cashflow: $-85/mo
• Annual: $-1,018/yr
• Cap rate: 5.88%
• Cash-on-cash: -1.48%
• DSCR: 0.93
• 1% rule: 1.02%
• Cash to close: $68,572

Investor read

• This is a 3-bed/2.5-bath single-family listed at $245k.
• At list price, monthly cash flow is $-85 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $230k (6.1% below list).
• Meets the 1% rule at list price ($3k rent vs $245k).
• It's been on market 67 days — a 6% lower offer ($230k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $230k (6.1% 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 $7k 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: Lawson Middle (math 21% / reading 27%, grade F, #1,301 of 1,662 statewide, top 79%, 1,274 students, 96% FRL); Worthing H S (math 22% / reading 21%, grade F, #1,377 of 1,632 statewide, top 85%, 827 students, 96% FRL) — zoned schools average 96% FRL vs 71% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.9% of price.
• Market conditions: Rents soft (-0.2%/yr); 280 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); 44% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 3 sale attempts since 16y 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.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.9% 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.
• This rent runs 38% of the median local income ($79k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 67 days. Have you received any prior offers? Is the seller open to a 6% 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 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?