Morgan Plan

Baytown, TX 77521

$262,990D-

3 bd · 2.0 ba · 1,709 sqft · Built — · SingleFamily · Active · 729 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,023/mo
• Mortgage (P&I): −$1,387
• Tax + insurance: −$441
• HOA: −$0
• Vac / Maint / Mgmt: −$425
• Net cashflow: $-229/mo
• Annual: $-2,752/yr
• Cap rate: 5.25%
• Cash-on-cash: -3.72%
• DSCR: 0.83
• 1% rule: 0.77%
• Cash to close: $74,043

Investor read

• This is a 3-bed/2.0-bath single-family listed at $263k. Condition is rated excellent.
• At list price, monthly cash flow is $-229 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $231k (12.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $202k (23.1% below list).
• It's been on market 729 days — a 12% lower offer ($231k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $202k (23.1% 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 $8k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#412 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, crime F, amenities F.
• Goose Creek CISD (urban): math 37% / reading 36% proficiency, ranked #473 of 826 in TX (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Victoria Walker El (math 40% / reading 42%, grade F, #1,462 of 4,322 statewide, top 34%, 829 students, 66% FRL); Highlands J H (math 46% / reading 37%, grade F, #595 of 1,662 statewide, top 37%, 994 students, 82% FRL); Goose Creek Memorial (math 28% / reading 45%, grade F, #924 of 1,632 statewide, top 57%, 2,223 students, 70% FRL).
• Market conditions: Rents rising (+1.5%/yr); 1121 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals lingering (median 55d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 81% of comp listings sitting > 30 days — soft ceiling on asking rent; 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 2y ago; this cycle's ask has dropped $57k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.3% vs local median 4.3% in Baytown — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 33% of the median local income ($74k/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 729 days. Have you received any prior offers? Is the seller open to a 23% 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?
• 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.