20019 Sterling Meadow Ct

Houston, TX 77449

$265,000D

3 bd · 2.5 ba · 2,274 sqft · Built 2003 · SingleFamily · Active · 368 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,207/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$650
• HOA: −$49
• Vac / Maint / Mgmt: −$463
• Net cashflow: $-345/mo
• Annual: $-4,139/yr
• Cap rate: 4.73%
• Cash-on-cash: -5.58%
• DSCR: 0.75
• 1% rule: 0.83%
• Cash to close: $74,200

Investor read

• This is a 3-bed/2.5-bath single-family listed at $265k.
• At list price, monthly cash flow is $-345 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (23.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $221k (16.7% below list).
• It's been on market 368 days — a 12% lower offer ($233k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $204k (23.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-1.3%/yr); year-one equity from $2k of loan paydown is wiped out by about $3k 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.
• Cypress-Fairbanks ISD (suburban): math 45% / reading 52% proficiency, ranked #161 of 826 in TX (top 20%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Duryea El (math 23% / reading 31%, grade F, #2,791 of 4,322 statewide, top 68%, 827 students, 83% FRL); Hopper Middle (math 24% / reading 34%, grade F, #1,103 of 1,662 statewide, top 67%, 930 students, 80% FRL); Cypress-Fairbanks J J A E P (12 students, 0% FRL).
• Zoned-school proficiency averages 28% at this address vs 48% district-wide (-20 pts) — the specific schools serving this property underperform the Cypress-Fairbanks ISD average; the district grade overstates school quality for this exact location.
• Market conditions: Rents soft (-2.9%/yr); 763 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• Climate carrying-cost: major flood risk; 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 4.7% 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.
• This rent runs 30% of the median local income ($88k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 368 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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?
• 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?