1398 Harbor Island Dr

Port Isabel, TX 78578

$489,000B

4 bd · 3.0 ba · 2,261 sqft · Built 2002 · SingleFamily · Active · 127 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,147/mo
• Mortgage (P&I): −$2,564
• Tax + insurance: −$1,466
• HOA: −$0
• Vac / Maint / Mgmt: −$1,291
• Net cashflow: $826/mo
• Annual: $9,907/yr
• Cap rate: 9.37%
• Cash-on-cash: 10.97%
• DSCR: 1.49
• 1% rule: 1.26%
• Cash to close: $136,920

Investor read

• This is a 4-bed/3.0-bath single-family listed at $489k.
• At list price, monthly cash flow is $826 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $489k).
• It's been on market 127 days — a 12% lower offer ($430k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $430k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#157 in TX, #4,282 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, schools F, crime F.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 254 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,326 units permitted in Cameron County in 2024 (503 in 5+ unit buildings).
• Cameron County population projected at +3% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 5→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.4% vs local median 3.4% in Port Isabel — 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

• It's been on market 127 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.