5704 Puffin Ave

McAllen, TX 78573

$524,900C-

None bd · None ba · 4,372 sqft · Built 2021 · MultiFamily · Active · 205 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,511/mo
• Mortgage (P&I): −$2,753
• Tax + insurance: −$875
• HOA: −$52
• Vac / Maint / Mgmt: −$947
• Net cashflow: $-116/mo
• Annual: $-1,389/yr
• Cap rate: 6.03%
• Cash-on-cash: -0.95%
• DSCR: 0.96
• 1% rule: 0.86%
• Cash to close: $146,972

Investor read

• This is a 2×3bd/2ba + 2×2bd/2ba units multifamily listed at $525k. Condition is rated excellent.
• At list price, monthly cash flow is $-116 ($-1k/yr) — negative. Per door: $-29/mo.
• To cash-flow at today's rent, offer at most $508k (3.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $451k (14.1% below list).
• It's been on market 205 days — a 12% lower offer ($462k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $451k (14.1% below list) — sets the bar for 1% rule.
• In year one you build about $56k of equity ($4k loan paydown + $52k appreciation (10.0% local appreciation)).
• 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.
• Sharyland ISD (urban): math 34% / reading 44% proficiency, ranked #406 of 826 in TX (top 49%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.5%/yr); 624 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 88% of comp listings sitting > 30 days — soft ceiling on asking rent; 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 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.
• By year 2, paydown + projected appreciation supports a ~$90k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 6→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% 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.
• At $4,511/mo this rent would consume 98% of the median local household income ($55k/yr) (locally 855% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 205 days. Have you received any prior offers? Is the seller open to a 14% 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?