20119 Forest Dr

Houston, TX 77388

$375,000D

4 bd · 3.5 ba · 3,046 sqft · Built 1994 · SingleFamily · Active · 51 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,490/mo
• Mortgage (P&I): −$1,967
• Tax + insurance: −$924
• HOA: −$63
• Vac / Maint / Mgmt: −$733
• Net cashflow: $-196/mo
• Annual: $-2,356/yr
• Cap rate: 5.66%
• Cash-on-cash: -2.24%
• DSCR: 0.90
• 1% rule: 0.93%
• Cash to close: $105,000

Investor read

• This is a 4-bed/3.5-bath single-family listed at $375k.
• At list price, monthly cash flow is $-196 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $340k (9.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $349k (6.9% below list).
• It's been on market 51 days — a 3% lower offer ($364k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $340k (9.2% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k 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.
• Klein ISD (suburban): math 41% / reading 48% proficiency, ranked #213 of 826 in TX (top 26%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Haude El (math 52% / reading 49%, grade D+, #833 of 4,322 statewide, top 20%, 678 students, 42% FRL); Schindewolf Int (math 31% / reading 43%, grade F, #756 of 1,662 statewide, top 47%, 1,152 students, 55% FRL); Klein H S (math 58% / reading 67%, grade B-, #234 of 1,632 statewide, top 14%, 3,352 students, 45% FRL).
• Market conditions: Rents soft (-1.1%/yr); 330 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 2 sale attempts since 5y ago; this cycle's ask has dropped $25k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $198k; list at $375k implies a 90% 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→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% 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 41% of the median local income ($102k/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 51 days. Have you received any prior offers? Is the seller open to a 9% 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?
• 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?
• 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.