3507 San Rafael Rd

Mercedes, TX 78570

$108,000B-

3 bd · 1.0 ba · 1,110 sqft · Built 1985 · SingleFamily · Active · 281 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,186/mo
• Mortgage (P&I): −$566
• Tax + insurance: −$180
• HOA: −$0
• Vac / Maint / Mgmt: −$249
• Net cashflow: $190/mo
• Annual: $2,285/yr
• Cap rate: 8.41%
• Cash-on-cash: 7.56%
• DSCR: 1.34
• 1% rule: 1.10%
• Cash to close: $30,240

Investor read

• This is a 3-bed/1.0-bath single-family listed at $108k. Condition is rated fair.
• At list price, monthly cash flow is $190 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $108k).
• It's been on market 281 days — a 12% lower offer ($95k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $95k (12.0% below list) — sets the bar for market timing.
• In year one you build about $6k of equity ($747 loan paydown + $5k appreciation (4.5% local appreciation)).
• Location reads 67/100 on livability (#547 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, commute F.
• Edcouch-Elsa ISD (suburban): math 9% / reading 20% proficiency, ranked #822 of 826 in TX (top 100%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Jorge R Gutierrez Early Childhood Center (432 students, 96% FRL); Carlos Truan J H (math 8% / reading 22%, grade F, #1,579 of 1,662 statewide, top 95%, 622 students, 93% FRL); Edcouch-Elsa H S (math 7% / reading 25%, grade F, #1,501 of 1,632 statewide, top 92%, 1,345 students, 94% FRL) — zoned schools average 95% FRL vs 74% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 433 active listings in the ZIP; lower-income renter base — watch delinquency; 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.
• At projected returns (4.5% appreciation + 3.0% rent growth), your $30k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 3.4% in Mercedes — 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 36% of the median local income ($40k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 281 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Moderate: Exterior paint — Weathered siding needs repainting for a fresh look.
• Minor: Kitchen cabinets — Wooden cabinets could be refinished or replaced for a more modern look.
• Minor: Bathroom fixtures — Basic fixtures could be updated for a more modern aesthetic.