Cleburne St

Houston, TX 77004

$850,000F

10 bd · 6.0 ba · 4,511 sqft · Built 1945 · Land · Active · 135 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,568/mo
• Mortgage (P&I): −$4,457
• Tax + insurance: −$645
• HOA: −$0
• Vac / Maint / Mgmt: −$539
• Net cashflow: $-3,074/mo
• Annual: $-36,891/yr
• Cap rate: 1.95%
• Cash-on-cash: -15.50%
• DSCR: 0.31
• 1% rule: 0.30%
• Cash to close: $238,000

Investor read

• This is a 10-bed/6.0-bath land listed at $850k.
• At list price, monthly cash flow is $-3k ($-37k/yr) — negative.
• To cash-flow at today's rent, offer at most $307k (63.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $257k (69.8% below list).
• It's been on market 135 days — a 12% lower offer ($748k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $257k (69.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k 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.
• Houston ISD (urban): math 27% / reading 35% proficiency, ranked #593 of 826 in TX (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 71% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Gregory-Lincoln Ed Ctr (math 14% / reading 30%, grade F, #3,333 of 4,322 statewide, top 80%, 600 students, 93% FRL); Lamar H S (math 38% / reading 65%, grade D+, #478 of 1,632 statewide, top 29%, 3,125 students, 49% FRL) — zoned schools at 71% FRL track the district average.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.3%/yr); 585 active listings in the ZIP; 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.
• 3 sale attempts since 20y ago; this cycle's ask is 89% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Cap rate 2.0% vs local median 3.1% in Houston — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 43% of the median local income ($71k/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 135 days. Have you received any prior offers? Is the seller open to a 70% concession, seller financing, or rate buy-down credit?
• Built in 1945 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?