407 S Minnesota Rd

Palmview, TX 78572

$535,000D

None bd · None ba · 4,940 sqft · Built 2004 · MultiFamily · Active · 493 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,486/mo
• Mortgage (P&I): −$2,806
• Tax + insurance: −$892
• HOA: −$0
• Vac / Maint / Mgmt: −$1,152
• Net cashflow: $637/mo
• Annual: $7,640/yr
• Cap rate: 7.72%
• Cash-on-cash: 5.10%
• DSCR: 1.23
• 1% rule: 1.03%
• Cash to close: $149,800

Investor read

• This is a 5 × 2-bed/2-bath units multifamily listed at $535k. Condition is rated fair.
• At list price, monthly cash flow is $637 ($8k/yr) — positive. Per door: $127/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $535k).
• It's been on market 493 days — a 12% lower offer ($471k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $471k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads 57/100 on livability (#1,267 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A; Watch: crime D, amenities F, commute 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.
• Zoned schools: Leo J Leo El (math 27% / reading 32%, grade F, #2,525 of 4,322 statewide, top 62%, 372 students, 92% FRL); Cesar Chavez Middle (math 25% / reading 35%, grade F, #1,056 of 1,662 statewide, top 65%, 666 students, 90% FRL); La Joya Palmview H S (math 20% / reading 37%, grade F, #1,157 of 1,632 statewide, top 72%, 2,155 students, 91% FRL) — zoned schools average 91% FRL vs 54% district-wide (38 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 852 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.
• Climate carrying-cost: severe wind risk, 94% chance of damaging wind over 30y; severe wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 4.2% in Palmview — 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.
• At $5,486/mo this rent would consume 121% of the median local household income ($54k/yr) (locally 1714% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 493 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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 D 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?

Repairs flagged (vision-AI assessment)

• Moderate: kitchen cabinets — dated and worn
• Moderate: bathroom fixtures — outdated and worn
• Minor: exterior siding — some wear