The Waring III Plan

Conroe, TX 77316

$334,990F

5 bd · 2.5 ba · 2,738 sqft · Built — · SingleFamily · Active · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,440/mo
• Mortgage (P&I): −$3,473
• Tax + insurance: −$1,104
• HOA: −$0
• Vac / Maint / Mgmt: −$512
• Net cashflow: $-2,649/mo
• Annual: $-31,791/yr
• Cap rate: 1.49%
• Cash-on-cash: -17.14%
• DSCR: 0.24
• 1% rule: 0.37%
• Cash to close: $185,446

Investor read

• This is a 5-bed/2.5-bath single-family listed at $335k. Condition is rated good.
• At list price, monthly cash flow is $-3k ($-32k/yr) — negative.
• To cash-flow at today's rent, offer at most $279k (16.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $244k (27.2% below list).
• It's been on market 61 days — a 6% lower offer ($315k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $244k (27.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $20k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#169 in TX, #4,447 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, amenities B; Watch: commute F, health & safety F.
• Montgomery ISD (rural): math 63% / reading 57% proficiency, ranked #49 of 826 in TX (top 6%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Lone Star El (math 57% / reading 61%, grade B-, #455 of 4,322 statewide, top 11%, 766 students, 16% FRL); Montgomery J H (math 68% / reading 54%, grade B+, #145 of 1,662 statewide, top 9%, 1,045 students, 30% FRL); Montgomery H S (math 53% / reading 62%, grade C, #327 of 1,632 statewide, top 20%, 1,556 students, 25% FRL) — zoned schools at 24% FRL track the district average.
• Watch-outs: property tax is 3.0% of price.
• Market conditions: Rents flat; 2300 active listings in the ZIP; high-income renter base; 13,259 units permitted in Montgomery County in 2024 (1,402 in 5+ unit buildings).
• Montgomery County population projected at +65% 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; moderate wildfire risk; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 1.5% vs local median 3.1% in Conroe — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 61 days. Have you received any prior offers? Is the seller open to a 27% 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?
• 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?
• 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.