1434 S Colorado Ave

Mercedes, TX 78570

$84,999A-

2 bd · 1.0 ba · 1,028 sqft · Built 1960 · SingleFamily · Active · 100 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,000/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$165
• HOA: −$0
• Vac / Maint / Mgmt: −$420
• Net cashflow: $970/mo
• Annual: $11,634/yr
• Cap rate: 19.98%
• Cash-on-cash: 48.88%
• DSCR: 3.18
• 1% rule: 2.35%
• Cash to close: $23,800

Investor read

• This is a 2-bed/1.0-bath single-family listed at $85k. Condition is rated fair.
• 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).
• It's been on market 100 days — a 9% lower offer ($77k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $77k (9.0% below list) — sets the bar for market timing.
• In year one you build about $4k of equity ($587 loan paydown + $4k appreciation (4.5% local appreciation)).
• 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: 488 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).
• 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.
• 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.
• 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.
• 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.

Questions for listing agent

• It's been on market 100 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.

Repairs flagged (vision-AI assessment)

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