120 5th St Unit 1-4

San Leon, TX 77539

$279,900F

1 bd · 1.0 ba · — sqft · Built 1975 · Condo · Active · 255 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,300/mo
• Mortgage (P&I): −$1,468
• Tax + insurance: −$893
• HOA: −$0
• Vac / Maint / Mgmt: −$273
• Net cashflow: $-1,334/mo
• Annual: $-16,010/yr
• Cap rate: 2.40%
• Cash-on-cash: -13.90%
• DSCR: 0.38
• 1% rule: 0.46%
• Cash to close: $78,372

Investor read

• This is a 1-bed/1.0-bath condo listed at $280k. Condition is rated good.
• At list price, monthly cash flow is $-1k ($-16k/yr) — negative.
• To cash-flow at today's rent, offer at most $87k (69.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $130k (53.6% below list).
• It's been on market 255 days — a 12% lower offer ($246k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $87k (69.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#899 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment B+; Watch: schools F, amenities F, commute F.
• Dickinson ISD (suburban): math 39% / reading 40% proficiency, ranked #366 of 826 in TX (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: Rents soft (-0.1%/yr); 664 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 3,258 units permitted in Galveston County in 2024 (0 in 5+ unit buildings).
• Galveston County population projected at +43% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→28/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.4% vs local median 1.8% in San Leon — 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 is only 18% of the median local income ($89k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 255 days. Have you received any prior offers? Is the seller open to a 69% concession, seller financing, or rate buy-down credit?
• Built in 1975 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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 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?