337 N Missouri Ave

Mercedes, TX 78570

$159,999D-

2 bd · None ba · 2,028 sqft · Built 2001 · Other · Active · 122 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $925/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$495
• HOA: −$0
• Vac / Maint / Mgmt: −$194
• Net cashflow: $-603/mo
• Annual: $-7,235/yr
• Cap rate: 2.27%
• Cash-on-cash: -14.37%
• DSCR: 0.36
• 1% rule: 0.58%
• Cash to close: $44,800

Investor read

• This is a 2-bed/?-bath other listed at $160k.
• At list price, monthly cash flow is $-603 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $87k (45.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $92k (42.2% below list).
• It's been on market 122 days — a 12% lower offer ($141k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $87k (45.8% below list) — sets the bar for cash-flow.
• In year one you build about $8k of equity ($1k loan paydown + $7k 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.
• 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.
• Watch-outs: property tax is 2.7% of price; flood insurance adds $66/mo.
• Market conditions: 390 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• By year 5, paydown + projected appreciation supports a ~$36k 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; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.3% vs local median 3.3% in Mercedes — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 122 days. Have you received any prior offers? Is the seller open to a 46% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?