2501 Jessica Ave

La Homa, TX 78574

$238,000F

2 bd · 1.0 ba · 956 sqft · Built 1974 · SingleFamily · Active · 203 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,325/mo
• Mortgage (P&I): −$1,248
• Tax + insurance: −$359
• HOA: −$0
• Vac / Maint / Mgmt: −$278
• Net cashflow: $-560/mo
• Annual: $-6,719/yr
• Cap rate: 3.47%
• Cash-on-cash: -10.08%
• DSCR: 0.55
• 1% rule: 0.56%
• Cash to close: $66,640

Investor read

• This is a 2-bed/1.0-bath single-family listed at $238k.
• At list price, monthly cash flow is $-560 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $139k (41.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $132k (44.3% below list).
• It's been on market 203 days — a 12% lower offer ($209k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $132k (44.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 56/100 on livability (#1,308 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A-; Watch: schools F, crime F, amenities F.
• La Joya ISD (suburban): math 18% / reading 29% proficiency, ranked #759 of 826 in TX (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 474 active listings in the ZIP; 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.
• Climate carrying-cost: 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 3.5% vs local median 5.5% in La Homa — 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 30% of the median local income ($52k/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 203 days. Have you received any prior offers? Is the seller open to a 44% concession, seller financing, or rate buy-down credit?
• Built in 1974 — 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 F-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?