802 E Starr St

Mercedes, TX 78570

$420,000C+

None bd · None ba · 4,050 sqft · Built 2024 · MultiFamily · Active · 214 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,338/mo
• Mortgage (P&I): −$2,203
• Tax + insurance: −$700
• HOA: −$0
• Vac / Maint / Mgmt: −$911
• Net cashflow: $524/mo
• Annual: $6,294/yr
• Cap rate: 7.79%
• Cash-on-cash: 5.35%
• DSCR: 1.24
• 1% rule: 1.03%
• Cash to close: $117,600

Investor read

• This is a 4 × 2-bed/1-bath units multifamily listed at $420k. Condition is rated excellent.
• At list price, monthly cash flow is $524 ($6k/yr) — positive. Per door: $131/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $420k).
• It's been on market 214 days — a 12% lower offer ($370k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $370k (12.0% below list) — sets the bar for market timing.
• In year one you build about $22k of equity ($3k loan paydown + $19k 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: schools D+, crime F, amenities 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.
• Market conditions: 390 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.
• 4 sale attempts since 2y ago; this cycle's ask has dropped $49k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (4.5% appreciation + 3.0% rent growth), your $118k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 7.8% vs local median 3.3% 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

• It's been on market 214 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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?
• 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.