1502 Diamond Ave

Penitas, TX 78576

$599,000B+

None bd · None ba · 10,164 sqft · Built 2003 · MultiFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,400/mo
• Mortgage (P&I): −$3,141
• Tax + insurance: −$998
• HOA: −$0
• Vac / Maint / Mgmt: −$2,604
• Net cashflow: $5,656/mo
• Annual: $67,877/yr
• Cap rate: 17.62%
• Cash-on-cash: 40.47%
• DSCR: 2.80
• 1% rule: 2.07%
• Cash to close: $167,720

Investor read

• This is a multifamily listed at $599k.
• At list price, monthly cash flow is $6k ($68k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($12k rent vs $599k).
• It's been on market 23 days — a 2% lower offer ($590k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $590k (1.5% below list) — sets the bar for market timing.
• In year one you build about $42k of equity ($4k loan paydown + $38k 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, 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: Cesar Chavez Middle (math 25% / reading 35%, grade F, #1,056 of 1,662 statewide, top 65%, 666 students, 90% FRL); La Joya H S (math 16% / reading 32%, grade F, #1,333 of 1,632 statewide, top 82%, 2,775 students, 92% FRL) — zoned schools average 91% FRL vs 54% district-wide (38 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 52 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.
• 5 sale attempts since 2y 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.
• At projected returns (6.3% appreciation + 3.0% rent growth), your $168k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$67k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 94% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 17.6% vs local median 3.2% in Penitas — 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

• 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?
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.