5500 Mcpherson Rd #56

Laredo, TX 78045

$159,000D

3 bd · 2.5 ba · 855 sqft · Built 1981 · Condo · Active · 406 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,215/mo
• Mortgage (P&I): −$834
• Tax + insurance: −$290
• HOA: −$0
• Vac / Maint / Mgmt: −$255
• Net cashflow: $-164/mo
• Annual: $-1,973/yr
• Cap rate: 5.05%
• Cash-on-cash: -4.43%
• DSCR: 0.80
• 1% rule: 0.76%
• Cash to close: $44,520

Investor read

• This is a 3-bed/2.5-bath condo listed at $159k.
• At list price, monthly cash flow is $-164 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $130k (18.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $122k (23.6% below list).
• It's been on market 406 days — a 12% lower offer ($140k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $122k (23.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#227 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, crime C-, employment D+.
• United ISD (urban): math 27% / reading 38% proficiency, ranked #568 of 826 in TX (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+4.7%/yr); 383 active listings in the ZIP; 21 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,448 units permitted in Webb County in 2024 (245 in 5+ unit buildings).
• Webb County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 4y 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.
• Cap rate 5.1% vs local median 4.1% in Laredo — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent is only 16% of the median local income ($91k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 406 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• 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?
• 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.
• 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.