38416 El Quelite Rd

Penitas, TX 78576

$119,000D-

2 bd · 1.0 ba · 1,000 sqft · Built 2023 · SingleFamily · Active · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $740/mo
• Mortgage (P&I): −$624
• Tax + insurance: −$262
• HOA: −$0
• Vac / Maint / Mgmt: −$155
• Net cashflow: $-302/mo
• Annual: $-3,622/yr
• Cap rate: 3.25%
• Cash-on-cash: -10.87%
• DSCR: 0.52
• 1% rule: 0.62%
• Cash to close: $33,320

Investor read

• This is a 2-bed/1.0-bath single-family listed at $119k.
• At list price, monthly cash flow is $-302 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $66k (44.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $74k (37.8% below list).
• It's been on market 80 days — a 6% lower offer ($112k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $66k (44.8% below list) — sets the bar for cash-flow.
• In year one you build about $8k of equity ($823 loan paydown + $8k appreciation (6.3% local appreciation)).
• Location reads 64/100 on livability (#820 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: employment D, schools 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: 52 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• 3 sale attempts 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.
• By year 5, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 96% chance of damaging wind over 30y; severe wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 80 days. Have you received any prior offers? Is the seller open to a 45% 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 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?
• 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.