8430 Round Rock Dr #8

Houston, TX 77049

$875,000B

16 bd · None ba · 1,710 sqft · Built 1957 · MultiFamily · Active · 39 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $13,130/mo
• Mortgage (P&I): −$4,589
• Tax + insurance: −$1,214
• HOA: −$0
• Vac / Maint / Mgmt: −$2,757
• Net cashflow: $4,570/mo
• Annual: $54,840/yr
• Cap rate: 12.65%
• Cash-on-cash: 22.71%
• DSCR: 2.01
• 1% rule: 1.50%
• Cash to close: $245,000

Investor read

• This is a 16-bed/?-bath multifamily listed at $875k.
• At list price, monthly cash flow is $5k ($55k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($13k rent vs $875k).
• It's been on market 39 days — a 3% lower offer ($849k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $849k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-1.2%/yr); year-one equity from $6k of loan paydown is wiped out by about $11k 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.
• Sheldon ISD (suburban): math 19% / reading 25% proficiency, ranked #746 of 826 in TX (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Sheldon Lake El (math 30% / reading 27%, grade F, #2,706 of 4,322 statewide, top 63%, 665 students, 86% FRL); C E King Middle (math 13% / reading 24%, grade F, #1,478 of 1,662 statewide, top 90%, 1,311 students, 90% FRL); C E King H S (math 19% / reading 30%, grade F, #1,264 of 1,632 statewide, top 82%, 3,473 students, 82% FRL).
• Watch-outs: flood insurance adds $66/mo; built in 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents falling (-3.3%/yr); 161 active listings in the ZIP; 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 2y 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.
• At projected returns (-1.2% appreciation + 0.0% rent growth), your $245k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk; 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 12.7% 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.
• At $13,130/mo this rent would consume 250% of the median local household income ($63k/yr) (locally 993% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 39 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1957 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.