Is 1434 S Colorado Ave in Mercedes, TX a good investment?

CashFlowRE grades it A- with a 20.0% cap rate and $970/mo modeled cash flow at a $84,999 list price. See the full underwriting and recommended offer on the page.

What is the cap rate for 1434 S Colorado Ave?

The modeled cap rate is 20.0% — annual NOI divided by price, using CashFlowRE's rent and expense estimates.

What would this property rent for?

Estimated market rent is $2,000/month, from CashFlowRE's rent model.

A- Composite 82.13

Why this score? — see what drove the A- grade

The composite is a weighted blend of 9 inputs, each scored 0–100. Each bar is that input's sub-score; the figure is the points it added to the 100-point composite (weight × sub-score).

Cash flow +30.0/30.0
ARV discount +15.0/15.0
1% rule +10.0/10.0
DSCR +10.0/10.0
Appreciation +7.3/10.0
Livability +3.4/5.0
Rent growth +2.5/5.0
Condition / age +2.2/5.0
Schools +1.8/10.0

$84,999

1434 S Colorado Ave · Mercedes, TX 78570

2 bd · 1.0 ba · 1,028 sqft · SingleFamily public records · 99 Days on market

Built 1960 Fair condition 7,405 sqft lot $83/sqft · 31% below area Est $123k · 31% under ↓ 5% since listing

🖨 Deal sheet (PDF) 📄 Offer letter ✓ Due diligence

Listing remarks

Charming and affordable home in the heart of Mercedes! This cozy 2-bedroom, 1-bath residence offers approximately 1,028 square feet of living space and sits on a spacious 7,501-square-foot lot. Built in 1960, the home features a functional layout, a metal roof, and plenty of potential for homeowners or investors alike. Step inside to find a comfortable living area, generously sized bedrooms, and a practical floor plan designed for everyday living. The large yard provides ample space for outdoor entertaining, gardening, future improvements, or additional storage. Conveniently located near schools, shopping, restaurants, and major roadways, this property offers both convenience and value.

Key facts

Spacious yard
Metal roof
Convenient location

What this means for you Summary

Snapshot

This is a 2-bed/1.0-bath single-family listed at $85k. Condition is rated fair.

Deal economics

At list price, monthly cash flow is $970 ($12k/yr) — positive.
The deal already cash-flows at list — no discount required.
Meets the 1% rule at list price ($2k rent vs $85k).
Recommended offer: $77k (9.0% below list) — sets the bar for market timing.
Cap rate 20.0% vs local median 3.5% 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.

Location & tenants

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: crime F, amenities F, commute 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.
Zoned schools: Travis El (math 17% / reading 22%, grade F, #3,583 of 4,322 statewide, top 86%, 506 students, 91% FRL); Sgt Manuel Chacon Middle (math 16% / reading 26%, grade F, #1,387 of 1,662 statewide, top 85%, 563 students, 87% FRL); Mercedes H S (math 8% / reading 12%, grade F, #1,591 of 1,632 statewide, top 98%, 974 students, 91% FRL).
Market conditions: 486 active listings in the ZIP; 1 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 7,378 units permitted in Hidalgo County in 2024 (641 in 5+ unit buildings).
At $2,000/mo this rent would consume 60% of the median local household income ($40k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Forward outlook

In year one you build about $4k of equity ($587 loan paydown + $4k appreciation (4.5% local appreciation)).
Hidalgo County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
At projected returns (4.5% appreciation + 3.0% rent growth), your $24k cash investment doubles in ~2 years — after that, you're playing with house money.
By year 8, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Negotiation context

It's been on market 99 days — a 9% lower offer ($77k) is reasonable based on typical stale-listing flexibility.

Risks & watch-outs

Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Recommended offer $77,349 (9.0% below list)

Questions for the listing agent

It's been on market 99 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
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.
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.

Investment metrics

1% rule: 2.35% ✓
Cap rate: 19.98%
Cash-on-cash: 48.88%
DSCR: 3.18
GRM: 3.5

CMA / ARV

ARV (median comp): $123,153
List price: $84,999
Delta: -30.98%
Verdict: UNDERPRICED
Comps: 20 within 1.0 mi

Show comp detail 12 sales within ~0.75 mi

Address	Dist	Beds/Ba	Sqft	Sold	Price	$/sf	Match
721 S Vermont Ave	0.50mi	2/2.5	1,000 (-3%)	4mo	$140,000	$140	63
545 S Colorado Ave	0.61mi	3/1.0 (+1)	1,036 (+1%)	8mo	$64,900	$63	59
1137 S Texas Ave	0.51mi	2/1.0	960 (-7%)	9mo	$70,000	$73	57
1143 S Washington Ave	0.27mi	3/2.0 (+1)	1,048 (+2%)	24mo	$160,000	$153	55
1151 S Texas Ave	0.52mi	3/1.0 (+1)	1,049 (+2%)	16mo	$75,000	$71	54
544 S Washington Ave	0.65mi	3/2.0 (+1)	1,003 (-2%)	11mo	$184,000	$183	47
1209 S Missouri Ave	0.43mi	2/1.0	938 (-9%)	22mo	$50,000	$53	47
1108 S Indiana Ave	0.28mi	3/2.0 (+1)	1,166 (+13%)	11mo	$179,900	$154	46
1113 S Colorado Ave	0.24mi	3/2.0 (+1)	1,120 (+9%)	23mo	$108,500	$97	46
546 S Georgia Ave	0.67mi	3/2.5 (+1)	1,000 (-3%)	16mo	$100,000	$100	40
1047 S Illinois St	0.68mi	3/2.0 (+1)	1,120 (+9%)	15mo	$159,000	$142	32
401 S Colorado Ave	0.72mi	3/1.0 (+1)	960 (-7%)	24mo	$139,900	$146	31

Match score weights: distance 35% · size 25% · config 20% · recency 20%. Top-matched comps best support the ARV.

Projected returns pro-forma

4.53% appreciation · 3.0% rent growth · sell at horizon

5-year hold

IRR: 56.0%
Equity multiple: 4.32×
Total profit: $79,101
Equity at exit: $45,738

10-year hold

IRR: 54.2%
Equity multiple: 8.86×
Total profit: $186,978
Equity at exit: $76,997

Cash invested: $23,800 (down + closing). Projections, not guarantees.

Landlord ↔ Tenant lean methodology

Overall (STATE): 87 Strongly Landlord-Friendly
State Texas: 87 Strongly Landlord-Friendly · R+5
County: — inherits STATE
City: — inherits STATE

3-day notice; statewide preemption; one of the fastest eviction climates; Travis County (Austin) slightly slower.

Methodology + full state rankings →

Buyer's market Market conditions within 1.0 mi — comparable homes for sale

Active competition Active MLS

For sale now: 11 active · 3 under contract
Months of supply: 66.0 mo (2%/mo absorbed)
Median asking: $148,000 ($142/sqft)
Median days on market: 171 d
This list price: 9% of active listings are priced below it
ARV vs active asking: -15.5% vs current asking $/sqft

Closed sales set the value; these active listings set current market conditions and a practical price ceiling.

ZIP-level market 78570

Home prices YoY: 1.9%
Active inventory: 486
Price-to-rent: 3.5×

Monthly cashflow live

Estimated rent: $2,000 medium interval (Pro) →
Mortgage (P&I): −$446
Tax from tax record: −$129 /mo · $1,552/yr
Insurance: −$35
HOA: −$0
Lot rent: −$0
Vacancy / Maint / Mgmt: −$420
Net cashflow: $970

Break-even live

Break-even rent $773

Max offer price $84,999

Occupancy floor 47%

Sensitivity live

Price	-10% $1,018	-5% $994	+0% $970	+5% $945	+10% $921
Rent	-10% $812	-5% $891	+0% $970	+5% $1,049	+10% $1,128
Rate	-1.0pp $1,012	-0.5pp $991	base $970	+0.5pp $948	+1.0pp $925

UW: 25.0% down · 7.5% · 30yr · 1.5% tax · 5.0% vac · 8.0% maint · 8.0% mgmt

Financing live

Cash to close

Down payment: $21,250
Closing costs: $2,550
Club membership (one-time): —
Reserves months: —
Total cash needed: —

Loan-product check · same deal, 3 products live

Conventional

25% down · 7.5% · 30yr

Cash invested: —
Monthly P&I: —
Monthly cashflow: —
DSCR: —
Eligible?: —

Personal DTI + credit; lowest rate.

DSCR

20% down · 8.5% · 30yr

Cash invested: —
Monthly P&I: —
Monthly cashflow: —
DSCR: —
Eligible?: —

No personal income docs; deal must DSCR.

Hard money

10% down · 12.0% · 12mo

Cash invested: —
Monthly P&I: —
Monthly cashflow: —
DSCR: —
Eligible?: —

Short-term bridge; refi at stabilization.

Rent comps 1 comps

Address	Beds	Baths	Sqft	Rent	$/sqft	DOM	Units	Dist
189 Lago Vista St Mercedes, TX	2.0	2.0	1164	$2,000	$1.72	139d	1	1.39mi

Property features AI

Finance

Financial info: Down payment resources not available
HOA & community: No subdivision (listed as NONE)

Exterior

Utilities: Sewer: none (see remarks)
Home design: Pre-owned propertyApproximate age: 66 years
Construction: Slab foundationMetal roof
Exterior features: Wood exterior

Interior

Kitchen: Kitchen (approx. 10 x 10)
Bedrooms: Master bedroom on lower level (approx. 10 x 10)Second bedroom (approx. 10 x 10)
Flooring: Laminate flooring
Bathrooms: 1 full bathroom
Heating & cooling: Other heating (see remarks)Other heating fuel (see remarks)Other air conditioning (see remarks)
Interior features: Open floor planLiving and dining room combinedWasher connectionDryer connection
Laundry & utility: Washer connectionDryer connection

Listing history 50 events

2026-09-23

days on market $84,999 Active 99 DOM
2026-09-21

days on market $84,999 Active 97 DOM
2026-09-20

days on market $84,999 Active 96 DOM
2026-09-19

days on market $84,999 Active 94 DOM
2026-09-17

days on market $84,999 Active 93 DOM
2026-09-17

days on market $84,999 Active 92 DOM
2026-09-16

days on market $84,999 Active 91 DOM
2026-09-14

days on market $84,999 Active 90 DOM
2026-09-13

days on market $84,999 Active 89 DOM
2026-09-12

days on market $84,999 Active 88 DOM
2026-09-11

days on market $84,999 Active 87 DOM
2026-09-05

statusdays on market $84,999 Active 81 DOM
2026-09-04

days on market $84,999 Price Change 80 DOM
2026-09-03

days on market $84,999 Price Change 79 DOM
2026-09-02

days on market $84,999 Price Change 78 DOM
2026-08-31

days on market $84,999 Price Change 75 DOM
2026-08-29

days on market $84,999 Price Change 74 DOM
2026-08-28

days on market $84,999 Price Change 73 DOM
2026-08-27

days on market $84,999 Price Change 72 DOM
2026-08-26

days on market $84,999 Price Change 71 DOM
2026-08-25

pricestatusdays on market $84,999 Price Change 70 DOM
2026-08-24

days on market $99,999 Active 69 DOM
2026-08-23

days on market $99,999 Active 68 DOM
2026-08-22

days on market $99,999 Active 67 DOM
2026-08-21

days on market $99,999 Active 66 DOM
2026-08-20

days on market $99,999 Active 65 DOM
2026-08-19

days on market $99,999 Active 64 DOM
2026-08-18

days on market $99,999 Active 63 DOM
2026-08-17

days on market $99,999 Active 62 DOM
2026-08-16

days on market $99,999 Active 61 DOM
2026-08-15

days on market $99,999 Active 60 DOM
2026-08-14

days on market $99,999 Active 59 DOM
2026-08-13

days on market $99,999 Active 58 DOM
2026-08-12

days on market $99,999 Active 57 DOM
2026-08-11

days on market $99,999 Active 56 DOM
2026-08-10

days on market $99,999 Active 55 DOM
2026-08-09

days on market $99,999 Active 54 DOM
2026-08-08

days on market $99,999 Active 53 DOM
2026-08-07

days on market $99,999 Active 52 DOM
2026-08-06

days on market $99,999 Active 51 DOM
2026-08-05

days on market $99,999 Active 50 DOM
2026-08-04

days on market $99,999 Active 49 DOM
2026-08-03

days on market $99,999 Active 48 DOM
2026-07-31

days on market $99,999 Active 45 DOM
2026-07-30

days on market $99,999 Active 44 DOM
2026-07-29

days on market $99,999 Active 43 DOM
2026-07-27

statusdays on market $99,999 Active 41 DOM
2026-07-26

days on market $99,999 Price Change 40 DOM
2026-07-24

days on market $99,999 Price Change 38 DOM
2026-07-23

days on market $99,999 Price Change 37 DOM

ⓘ Source: listings_history table (triggers on properties + properties_extension) + one-shot backfill from property_details.listing_events for pre-trigger history.

Tax reassessment forecast TX · Resets to sale price

Current annual tax: $1,552 · $129/mo
Projected year-2 tax: $1,555 · $130/mo
Expected delta: +$4/yr ($0/mo · 0.2%)

ⓘ Screening estimate from a state-policy table — verify with the county assessor before closing.

Climate risk First Street

🌊 Flood 1/10 Low FEMA zone X (shaded) · 0% chance over 30 yrs
🔥 Wildfire 2/10 Low
🌡 Heat 9/10 Extreme 7 d/yr ≥110°F today · 23 d/yr by 30 yrs out
💨 Wind 8/10 Severe 99% chance of damaging wind over 30 yrs
🫁 Air quality 1/10 Low 0 unhealthy d/yr today · 0 by 30 yrs out

Nearby sold comps map

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Walkable amenities ~0.75 mi

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Taxation est. · year 1

Rental income: $24,000
− Mortgage interest: −$4,761
− Property taxes: −$1,552
− Insurance: −$425
− Repairs & maintenance: −$1,920
− Management: −$1,920
− Depreciation: −$2,473
Taxable income: $10,949

Your marginal tax rate % combined federal + state — saved on this device

Est. tax owed @ 24.0%: −$2,628
After-tax cash flow: $9,007/yr

For passive investors: Depreciation is non-cash, so a rental often shows a tax loss while cash-flowing — sheltering income. Rental losses are passive: they offset passive income freely, and up to $25,000/yr can offset ordinary (W-2) income if you actively participate and your MAGI is under $100k (phasing out to $0 by $150k); unused losses carry forward. On sale, claimed depreciation is recaptured at up to 25%, and gains may owe capital-gains tax (a 1031 exchange can defer both). Figures are a year-1 estimate at your 24.0% rate — not tax advice; consult a CPA.

Condition & rehab AI · 9 photos

Fair 45/100 Moderate rehab Est. rehab $25,700–$46,260 screening

This charming 2-bedroom home in Mercedes requires moderate repairs and maintenance, particularly in the exterior and interior paint. Painting and updating the bathroom can significantly increase its value for both resale and rental.

Components & finishes AI

Flooring carpet

Repairs flagged

Minor Paint — Paint appears faded in some areas
Minor Bathroom Fixtures — Dated and possibly worn fixtures

Value-add opportunities

Both Painting — Fresh paint can improve curb appeal and interior aesthetics ↑
Both Bathroom Renovation — Updating fixtures and tile can significantly enhance the bathroom's functionality and value ↑

ⓘ Rehab cost is a screening estimate — Moderate scope × the home's square footage at US $/sqft rules of thumb (the same model as the Flip Finder). Get contractor quotes + a written scope before underwriting.

F Composite school gradezoned avg 18/100

Zoned Schools

Elementary Travis El F TX #3,583/4,322 Nat'l #33,738/41,679 Middle Sgt Manuel Chacon Middle F TX #1,387/1,662 Nat'l #11,464/14,009 High Triumph Public High Schools-Mercedes F TX #1,539/1,632 Nat'l #15,707/17,239

Schools (NCES district)

District: Mercedes ISD
NCES district ID: 4830250
Math proficiency: 12% ▼ -26.00%
Reading proficiency: 21% ▼ -10.00%
Median HH income: $27,606
Composite: 12.84/100
National rank: #9596
State rank: #811 of 826 in TX

C Composite livability gradescore 67/100

Livability — Mercedes

Score: 67/100
State rank: #547
US rank: #10619

Category grades

Amenities F Commute F Cost of living A+ Crime F Employment F Housing A+ Health & safety A+ User ratings B-

Schools grade is shown separately in the Schools card above.

Census & demographics

Census place: Mercedes, TX
County: Hidalgo · 955,232 people
City population: 33,596
Metro: McAllen-Edinburg-Mission, TX
Population (ZIP): 33,596
Household income: $39,890
Rent vs Own: 26.2% rent · 73.8% own
Severe rent burden: 12% of renters

Population outlook (Hidalgo County) Hauer SSP2

Today (2025): 955,232 people
By 2030: 1,009,774 · +5.7%
By 2040: 1,120,332 · +17.3%
By 2050: 1,225,036 · +28.2%
By 2075: 1,439,189 · +50.7%
By 2100: 1,533,429 · +60.5%

Race, ethnicity, and origin ACS 2023

Neighborhood character: Predominantly Hispanic (96%)
Race & ethnicity: Hispanic / Latino 96% Two or more races 44% White 4%
Hispanic origin (detail): Mexican 91%
Foreign-born: 20% · Canada
Languages at home: 18% English-only · Spanish 82%

Political lean MEDSL · Hidalgo

2024 margin: Toss-up / Even · D 48.1% · R 51.0%
2008→2024 swing: -41.6pp toward R · 2008: 38.7pp · 2024: -2.9pp
All cycles: 2024: R+2.9 2020: D+17.1 2016: D+40.5 2012: D+41.8 2008: D+38.7

Not yet ingested

Civics: —

Market trends

HPI YoY: ▲ 4.53%
Current HPI: 238.8386
Rent YoY: —
Metro: —
State GDP YoY: ▲ 3.95%
F500 in state: 110

Industry mix (Fortune 500 HQ in TX)

Industry	F500 HQs	Revenue
Energy	16	$1,198B
#8 Exxon Mobil Spring $349.6B #16 Chevron Houston $202.8B #28 Phillips 66 Houston $145.5B #34 Valero Energy San Antonio $124.0B #53 Energy Transfer Dallas $82.7B #75 ConocoPhillips Houston $57.0B #78 Enterprise Products Partners Houston $56.2B #92 Plains GP Holdings Houston $50.1B #134 HF Sinclair Dallas $29.6B #142 Occidental Petroleum Houston $26.3B #173 Targa Resources Houston $19.4B #188 Cheniere Energy Houston $17.6B #239 Kinder Morgan Houston $15.3B #419 APA Corporation Houston $8.6B #393 Cabot Oil & Gas Houston $7.9B #455 Coterra Energy Houston $5.8B
Technology	5	$198B
#44 Dell Technologies Round Rock $95.6B #87 Oracle Austin $53.0B #132 Hewlett Packard Enterprise Spring $30.1B #193 Texas Instruments Dallas $16.3B #406 Match Group Dallas $3.4B
Engineering / Construction	4	$72B
#228 Quanta Services Houston $23.7B #258 Jacobs Solutions Dallas $16.3B #318 AECOM Dallas $16.1B #279 Fluor Irving $16.1B
Energy Services	3	$60B
#136 Baker Hughes Houston $28.5B #154 Halliburton Houston $23.1B #368 Smith International Houston $8.4B
Utilities	3	$41B
#194 Vistra Irving $16.3B #211 NRG Energy Houston $15.4B #259 CenterPoint Energy Houston $9.4B
Healthcare	2	$330B
#9 McKesson Irving $309.0B #163 Tenet Healthcare Dallas $20.6B

Price history

-4.8% since first listed

2 events — show timeline

2026-07-17 Price Changed $99,999 LERA
2026-06-16 Listed $104,999 LERA

Property tax history

+6.0%/yr

Latest (2025): $1,552 · +8.8% YoY. Source: county tax records.

Cash-flow waterfall

monthly

Sold comps — $/sqft

last 12 mo · ≤1 mi

Loading sold comps…