424 Thomas St

Clute, TX 77531

$117,500D-

2 bd · 1.0 ba · 816 sqft · Built 1950 · SingleFamily · Active · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $976/mo
• Mortgage (P&I): −$616
• Tax + insurance: −$211
• HOA: −$0
• Vac / Maint / Mgmt: −$205
• Net cashflow: $-56/mo
• Annual: $-671/yr
• Cap rate: 5.72%
• Cash-on-cash: -2.04%
• DSCR: 0.91
• 1% rule: 0.83%
• Cash to close: $32,900

Investor read

• This is a 2-bed/1.0-bath single-family listed at $118k.
• At list price, monthly cash flow is $-56 ($-671/yr) — negative.
• To cash-flow at today's rent, offer at most $108k (8.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $98k (16.9% below list).
• It's been on market 33 days — a 3% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $98k (16.9% below list) — sets the bar for 1% rule.
• In year one you build about $7k of equity ($812 loan paydown + $6k appreciation (4.9% local appreciation)).
• Location reads 61/100 on livability (#1,002 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, employment D+, amenities F.
• Brazosport ISD (suburban): math 43% / reading 41% proficiency, ranked #305 of 826 in TX (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Griffith El (math 47% / reading 47%, grade D-, #1,006 of 4,322 statewide, top 25%, 541 students, 76% FRL); Clute Int (math 34% / reading 28%, grade F, #1,015 of 1,662 statewide, top 62%, 946 students, 73% FRL); Brazoswood H S (math 38% / reading 44%, grade F, #774 of 1,632 statewide, top 49%, 2,398 students, 54% FRL).
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 115 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 3,960 units permitted in Brazoria County in 2024 (593 in 5+ unit buildings).
• Brazoria County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 7y ago; this cycle's ask has dropped $8k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (4.9% appreciation + 3.0% rent growth), your $33k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 2.5% in Clute — 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 33 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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.
• 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.