A Marketed Duplex Projected $2,700 in Rent. The Comps Say $2,300.

By Steve Waller · September 9, 2026

What was checked

Three Houston-area properties marketed to investors this week, screened the way any file on this desk gets screened: the after-repair value against what the zip code is actually absorbing, the repair number against the age and configuration of the house, and the rent projection against what comparable units are asking today.

This is a zip-code-level check rather than a subdivision comp set. None of the three were marketed with an address, which is worth noting on its own. An investor cannot verify an after-repair value without one, and neither can a lender.

The duplex, where the rent projection is the whole deal

Two two-bedroom, one-bath units, 1,560 square feet total, individually metered, fully occupied month to month. Asking $162,000. In-place rent $1,725 for the pair. Projected market rent, per the marketing, $2,600 to $2,800.

Comparable two-bedroom rentals in that zip code are asking between $1,095 and $1,500, averaging near $1,264. The listing at $1,095 is a 780 square foot two-bedroom, one-bath, which is the same configuration and the same size as each half of this duplex. The projection assumes $1,300 to $1,400 a unit. The comparable units support closer to $1,100 to $1,200.

The supportable number for the pair is $2,200 to $2,400.

The deal survives that. At a 75 percent advance against a $235,000 value, roughly $176,000 of debt at current thirty-year pricing carries about $1,900 a month once taxes and Texas insurance are included. At $2,300 in rent the lender coverage ratio lands near 1.20. At the marketed $2,700 it would have been 1.41.

Both of those finance. One of them is true. An investor who underwrites at 1.41 and closes at 1.20 has spent his cushion before he owns the building.

The upside on this one is real, which is the part worth keeping. In-place rent works out to about $862 a unit, roughly a quarter under even the conservative market figure, and individually metered utilities are what make that raise stick.

The house where the missing number is square footage

A three-bedroom, one-bath frame house on a 5,000 square foot lot, asking $79,950 against a $50,000 repair estimate and a $200,000 after-repair value.

Thirteen three-bedroom houses sold in that zip code in the last six months. Nine of them closed at $200,000 or more, so the after-repair value is not the problem. Median sold price came to $163.72 a square foot, with the renovated end of the set running $170 to $203 and the untouched end sitting at $75 to $93.

One assumption worth throwing out: the single bathroom is not what decides this. Three of the thirteen sales were one-bath houses, and one of those was the second highest price in the whole set at $277,500. Bath count moves the number. It does not cap it.

Size decides it, and the seller did not publish the square footage. At a renovated $170 to $185 a foot, a $200,000 finished value needs roughly 1,100 to 1,180 square feet. An 1,170 square foot house in that zip sold for $208,000 this year, so that is an ordinary outcome rather than a stretch. But two of the thirteen were around 900 square feet and they closed at $72,000 and $140,000.

So the deal clears the seventy percent test by about $10,000 if the house is eleven hundred feet or better. If it is nine hundred, the after-repair value is nearer $155,000, the maximum supportable purchase falls to about $58,500, and the asking price is twenty-one thousand dollars too high.

One question to the seller settles it, and the listing did not include it.

The one that does not work

A four-bedroom asking $178,000 against a stated after-repair value of $250,000 to $260,000, with rents quoted at $1,800 to $2,000.

Seventy percent of a $255,000 value is $178,500. That is the maximum supportable purchase price before a dollar of repairs, so the asking price is the entire budget. As a rental the coverage ratio lands near 0.90 once Texas taxes and insurance are carried, and that does not finance.

It is a retail listing carrying a licence number, priced like one. Nothing is wrong with the house. It is not an investor deal.

The pattern

Two of the three carried numbers that hold up. The marketing on the third was accurate and the price was simply retail. The gap on the duplex was not dishonesty either. Projected rent is a genuinely soft figure, and everyone marketing property rounds it upward.

What that suggests on anything marketed to you this week:

• Ask for the address before spending an hour on the analysis. An after-repair value without one cannot be checked by you or by anyone lending against it.
• Price rent off units of the same size and configuration, not off the zip code average. A 780 square foot two-bedroom does not rent like a 1,200 square foot two-bedroom.
• Do the same with the after-repair value. A zip code average blends renovated and untouched stock and it blends subdivisions that do not compete with each other, so it is not a comparable set. Sold prices for the same bedroom count in the same subdivision are.
• Underwrite at the coverage ratio you can defend rather than the one that makes the file work.
• Run the seventy percent test before the financing question. When the purchase price exceeds seventy percent of value less repairs, the loan is not what is wrong.

Sources

• HAR.com — 77012 Houston market summary
• HAR.com — 77539 Dickinson homes for rent
• HAR.com — Houston price trends

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

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