1500 Bay Area Blvd #286

Houston, TX 77058

$88,800D

2 bd · 2.0 ba · 850 sqft · Built 1978 · Condo · Pending · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,208/mo
• Mortgage (P&I): −$466
• Tax + insurance: −$224
• HOA: −$411
• Vac / Maint / Mgmt: −$254
• Net cashflow: $-146/mo
• Annual: $-1,747/yr
• Cap rate: 4.33%
• Cash-on-cash: -7.03%
• DSCR: 0.69
• 1% rule: 1.36%
• Cash to close: $24,864

Investor read

• This is a 2-bed/2.0-bath condo listed at $89k.
• At list price, monthly cash flow is $-146 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $63k (29.0% below list).
• Meets the 1% rule at list price ($1k rent vs $89k).
• It's been on market 25 days — a 2% lower offer ($87k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $63k (29.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-1.2%/yr); year-one equity from $614 of loan paydown is wiped out by about $1k 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.
• Clear Creek ISD (suburban): math 48% / reading 54% proficiency, ranked #114 of 826 in TX (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Falcon Pass El (math 52% / reading 56%, grade C, #664 of 4,322 statewide, top 16%, 573 students, 41% FRL); Space Center Int (math 31% / reading 44%, grade F, #736 of 1,662 statewide, top 45%, 827 students, 57% FRL); Clear Creek H S (math 51% / reading 54%, grade C-, #444 of 1,632 statewide, top 27%, 2,400 students, 0% FRL).
• Watch-outs: property tax is 2.5% of price; HOA is 34% of rent.
• Market conditions: Rents rising (+1.9%/yr); 134 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 2 sale attempts 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.
• Current owner paid $29k; list at $89k implies a 207% 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→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.3% 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?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?