196 Lago Vista St

Mercedes, TX 78570

$68,900B

2 bd · 2.0 ba · 930 sqft · Built 2014 · Other · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,135/mo
• Mortgage (P&I): −$361
• Tax + insurance: −$115
• HOA: −$0
• Vac / Maint / Mgmt: −$238
• Net cashflow: $420/mo
• Annual: $5,044/yr
• Cap rate: 13.61%
• Cash-on-cash: 26.15%
• DSCR: 2.16
• 1% rule: 1.65%
• Cash to close: $19,292

Investor read

• This is a 2-bed/2.0-bath other listed at $69k. Condition is rated fair.
• At list price, monthly cash flow is $420 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $69k).
• It's been on market 34 days — a 3% lower offer ($67k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $67k (3.0% below list) — sets the bar for market timing.
• In year one you build about $4k of equity ($476 loan paydown + $3k 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: schools D+, crime F, amenities F.
• Weslaco ISD (suburban): math 23% / reading 31% proficiency, ranked #705 of 826 in TX (top 85%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 390 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% 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.
• At projected returns (4.5% appreciation + 3.0% rent growth), your $19k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$31k 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 13.6% vs local median 3.3% 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.

Questions for listing agent

• It's been on market 34 days. Have you received any prior offers? Is the seller open to a 3% 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?
• 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.

Repairs flagged (vision-AI assessment)

• Minor: exterior siding — Siding shows some wear
• Minor: flooring — Flooring looks worn