The Gateway (390) Plan

Conroe, TX 77316

$326,990F

4 bd · 2.5 ba · 2,255 sqft · Built — · SingleFamily · Active · 208 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,555/mo
• Mortgage (P&I): −$1,873
• Tax + insurance: −$595
• HOA: −$0
• Vac / Maint / Mgmt: −$537
• Net cashflow: $-450/mo
• Annual: $-5,403/yr
• Cap rate: 4.78%
• Cash-on-cash: -5.40%
• DSCR: 0.76
• 1% rule: 0.72%
• Cash to close: $100,020

Investor read

• This is a 4-bed/2.5-bath single-family listed at $327k.
• At list price, monthly cash flow is $-450 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $292k (10.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $255k (21.9% below list).
• It's been on market 208 days — a 12% lower offer ($288k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $255k (21.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $11k 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: schools D+, 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.
• Market conditions: Rents flat; 2283 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 83% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 10 sale attempts; this cycle's ask is 11% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Cap rate 4.8% vs local median 3.1% in Conroe — 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 208 days. Have you received any prior offers? Is the seller open to a 22% 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.
• 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.
• 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.