16027 Lakestone Dr

Houston, TX 77377

$260,000D

3 bd · 2.5 ba · 2,267 sqft · Built 1989 · SingleFamily · Pending · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,261/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$675
• HOA: −$50
• Vac / Maint / Mgmt: −$475
• Net cashflow: $-302/mo
• Annual: $-3,618/yr
• Cap rate: 4.90%
• Cash-on-cash: -4.97%
• DSCR: 0.78
• 1% rule: 0.87%
• Cash to close: $72,800

Investor read

• This is a 3-bed/2.5-bath single-family listed at $260k.
• At list price, monthly cash flow is $-302 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $207k (20.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $226k (13.0% below list).
• It's been on market 31 days — a 3% lower offer ($252k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $207k (20.5% 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 $8k 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: schools D, crime F.
• Tomball ISD (suburban): math 66% / reading 63% proficiency, ranked #25 of 826 in TX (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 2.6% of price.
• Market conditions: Rents soft (-0.7%/yr); 728 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 57% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 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.
• Current owner paid $111k; list at $260k implies a 134% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: 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 4.9% vs local median 3.1% 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

• 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 31 days. Have you received any prior offers? Is the seller open to a 20% 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?
• 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?
• 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?