Osprey Plan

Mercedes, TX 78570

$189,990F

4 bd · 2.0 ba · 1,462 sqft · Built — · SingleFamily · Active · 96 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,425/mo
• Mortgage (P&I): −$1,081
• Tax + insurance: −$343
• HOA: −$0
• Vac / Maint / Mgmt: −$299
• Net cashflow: $-298/mo
• Annual: $-3,582/yr
• Cap rate: 4.55%
• Cash-on-cash: -6.21%
• DSCR: 0.72
• 1% rule: 0.69%
• Cash to close: $57,699

Investor read

• This is a 4-bed/2.0-bath single-family listed at $190k.
• At list price, monthly cash flow is $-298 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $163k (14.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $142k (25.0% below list).
• It's been on market 96 days — a 9% lower offer ($173k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $142k (25.0% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($1k loan paydown + $9k 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.
• Mercedes ISD (suburban): math 12% / reading 21% proficiency, ranked #811 of 826 in TX (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Taylor El (math 17% / reading 12%, grade F, #4,048 of 4,322 statewide, top 95%, 410 students, 95% FRL); Sgt William G Harrell Middle (math 6% / reading 18%, grade F, #1,623 of 1,662 statewide, top 98%, 451 students, 95% FRL); Mercedes H S (math 8% / reading 12%, grade F, #1,591 of 1,632 statewide, top 98%, 974 students, 91% FRL).
• Market conditions: 393 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.
• By year 4, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.6% 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.

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 96 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• 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?
• 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.