500 E El Rancho Ave #22

McAllen, TX 78503

$150,000D

2 bd · 2.0 ba · 1,301 sqft · Built 1989 · Condo · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,475/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$261
• HOA: −$104
• Vac / Maint / Mgmt: −$310
• Net cashflow: $13/mo
• Annual: $161/yr
• Cap rate: 6.40%
• Cash-on-cash: 0.38%
• DSCR: 1.02
• 1% rule: 0.98%
• Cash to close: $42,000

Investor read

• This is a 2-bed/2.0-bath condo listed at $150k.
• At list price, monthly cash flow is $13 ($161/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $147k (1.7% below list).
• It's been on market 55 days — a 3% lower offer ($146k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $146k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#119 in TX, #3,771 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Pharr-San Juan-Alamo ISD (suburban): math 18% / reading 30% proficiency, ranked #740 of 826 in TX (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Geraldine Palmer El (math 17% / reading 32%, grade F, #3,052 of 4,322 statewide, top 74%, 644 students, 88% FRL); Kennedy Middle (math 22% / reading 27%, grade F, #1,279 of 1,662 statewide, top 78%, 580 students, 94% FRL); Psja Southwest Early College H S (math 18% / reading 37%, grade F, #1,183 of 1,632 statewide, top 73%, 1,692 students, 98% FRL) — zoned schools average 93% FRL vs 72% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents falling (-4.2%/yr); 214 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 52% of comp listings sitting > 30 days — soft ceiling on asking rent; 7,378 units permitted in Hidalgo County in 2024 (641 in 5+ unit buildings).
• Hidalgo County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 9y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.7% in McAllen — 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 runs 33% of the median local income ($53k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.