531 tenanted rentals across three Texas markets. None work at the asking price.

I screen listings against a hard money purchase test, and tenant-occupied rentals for sale keep producing the same answer.

Houston, Harris County: 325 of them. San Antonio, Bexar County: 181. A twenty-zip corridor south and east of Houston: 25. That is 531 listings across three markets, and not one supports a purchase at the asking price.

The test is purchase plus repairs plus closing costs, all of it inside the advance against after-repair value. And note it is MORE generous on a tenanted file than on a flip, because repairs are a make-ready allowance rather than a renovation budget. It still fails. Median gap between ask and the fundable maximum in that corridor was 43%. Closest single file was 15.3% over.

I think the reason is structural rather than market conditions. A tenanted rental gets sold to somebody buying income, and that buyer is measured on yield, not on repair spread. So the seller prices to a yield the market accepts, which is a retail price with a lease attached. The tenant is a feature the seller charges for. It was never a discount.

The part that actually changed how I look at these: I ran debt coverage twice on every file with usable rent evidence, once at the asking price and once at the fundable maximum. At asking, zero of eighteen cleared 1.25. At the maximum, eight cleared it comfortably, the best at 3.36, then 2.03, then two above 1.6. Same houses, same tenants. Only the price moved. Coverage is not a property characteristic, it is a price characteristic.

Two things I would push back on in most rental screens I see.

First, do not drop a rental because it is sitting vacant. If the house has rent history you know what it earns, and unlike a tenant that history does not move out. A closed lease on the subject beats a neighborhood median every time. Vacancy is not the disqualifier; no rent record is.

Second, pull the tax rate per listing. On one file the highest rent on my whole board still failed coverage because the city runs 2.6978% -- over ten thousand a year on a mid-priced house before a single repair. It is invisible in the purchase formula and decisive on a hold.

So my question for the landlords here: has anyone actually bought a tenant-occupied listing off the MLS at or near asking and had it pencil? I am starting to think the only ones that work are bought from somebody who is not pricing to yield -- estates, tired out-of-state owners, portfolio exits. Curious whether that matches your experience or whether I am screening wrong.