3616 Hawthorne Ave

Edinburg, TX 78539

$460,000D

None bd · None ba · 3,360 sqft · Built 2020 · MultiFamily · Active · 94 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,104/mo
• Mortgage (P&I): −$2,412
• Tax + insurance: −$833
• HOA: −$60
• Vac / Maint / Mgmt: −$862
• Net cashflow: $-63/mo
• Annual: $-759/yr
• Cap rate: 6.30%
• Cash-on-cash: 0.03%
• DSCR: 1.00
• 1% rule: 0.89%
• Cash to close: $128,800

Investor read

• This is a 2×1bd/1ba + 2×2bd/2ba units multifamily listed at $460k. Condition is rated good.
• At list price, monthly cash flow is $-63 ($-759/yr) — negative. Per door: $-16/mo.
• To cash-flow at today's rent, offer at most $451k (2.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $410k (10.8% below list).
• It's been on market 94 days — a 9% lower offer ($419k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $410k (10.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#784 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D, amenities F, commute F.
• Edinburg CISD (urban): math 20% / reading 34% proficiency, ranked #699 of 826 in TX (top 85%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Trevino El (math 36% / reading 49%, grade F, #1,313 of 4,322 statewide, top 31%, 655 students, 48% FRL); Elias Longoria Sr Middle (math 16% / reading 35%, grade F, #1,236 of 1,662 statewide, top 76%, 804 students, 82% FRL); Robert R Vela H S (math 27% / reading 48%, grade F, #888 of 1,632 statewide, top 55%, 2,189 students, 62% FRL) — zoned schools at 64% FRL track the district average.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents soft (-0.5%/yr); 411 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 64% 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.
• Climate carrying-cost: severe flood risk; severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 2.4% in Edinburg — 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 $4,104/mo this rent would consume 74% of the median local household income ($67k/yr) (locally 1525% 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 94 days. Have you received any prior offers? Is the seller open to a 11% 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's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.