Covington Plan

Richmond, TX 77406

$389,990F

4 bd · 3.0 ba · 2,437 sqft · Built — · SingleFamily · Active · 270 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,726/mo
• Mortgage (P&I): −$2,335
• Tax + insurance: −$742
• HOA: −$0
• Vac / Maint / Mgmt: −$572
• Net cashflow: $-923/mo
• Annual: $-11,080/yr
• Cap rate: 3.80%
• Cash-on-cash: -8.89%
• DSCR: 0.60
• 1% rule: 0.61%
• Cash to close: $124,656

Investor read

• This is a 4-bed/3.0-bath single-family listed at $390k. Condition is rated good.
• At list price, monthly cash flow is $-923 ($-11k/yr) — negative.
• To cash-flow at today's rent, offer at most $312k (20.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $273k (30.1% below list).
• It's been on market 270 days — a 12% lower offer ($343k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $273k (30.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#363 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety B+; Watch: crime C-, amenities F, commute F.
• Lamar CISD (suburban): math 50% / reading 53% proficiency, ranked #116 of 826 in TX (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Joe Hubenak El (math 57% / reading 61%, grade B-, #455 of 4,322 statewide, top 11%, 1,214 students, 37% FRL); Briscoe J H (math 59% / reading 60%, grade B, #166 of 1,662 statewide, top 11%, 1,914 students, 38% FRL); Foster H S (math 64% / reading 74%, grade B, #141 of 1,632 statewide, top 9%, 2,388 students, 34% FRL).
• Market conditions: Rents soft (-1.6%/yr); 1487 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals lingering (median 93d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 56% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 12,093 units permitted in Fort Bend County in 2024 (815 in 5+ unit buildings).
• Fort Bend County population projected at +75% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.8% vs local median 2.8% in Richmond — 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 270 days. Have you received any prior offers? Is the seller open to a 30% concession, seller financing, or rate buy-down credit?
• 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.
• 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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.