3220 W Providence Ave

McAllen, TX 78504

$205,000D+

3 bd · 3.0 ba · 1,864 sqft · Built 2004 · SingleFamily · Active · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,159/mo
• Mortgage (P&I): −$1,075
• Tax + insurance: −$485
• HOA: −$0
• Vac / Maint / Mgmt: −$453
• Net cashflow: $146/mo
• Annual: $1,753/yr
• Cap rate: 7.15%
• Cash-on-cash: 3.05%
• DSCR: 1.14
• 1% rule: 1.05%
• Cash to close: $57,400

Investor read

• This is a 3-bed/3.0-bath single-family listed at $205k.
• At list price, monthly cash flow is $146 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $205k).
• It's been on market 87 days — a 6% lower offer ($193k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $193k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#119 in TX, #3,771 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Mcallen ISD (urban): math 34% / reading 45% proficiency, ranked #440 of 826 in TX (top 53%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.6%/yr); 888 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 53% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 2 sale attempts since 14y 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.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.1% vs local median 3.7% in McAllen — 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.
• This rent runs 32% of the median local income ($82k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 87 days. Have you received any prior offers? Is the seller open to a 6% 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.