5605 N 41st St N

McAllen, TX 78504

$240,000F

3 bd · 2.0 ba · 1,942 sqft · Built 2004 · SingleFamily · Pending · 102 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,023/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$634
• HOA: −$0
• Vac / Maint / Mgmt: −$425
• Net cashflow: $-295/mo
• Annual: $-3,539/yr
• Cap rate: 4.82%
• Cash-on-cash: -5.27%
• DSCR: 0.77
• 1% rule: 0.84%
• Cash to close: $67,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $240k.
• At list price, monthly cash flow is $-295 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $188k (21.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $202k (15.7% below list).
• It's been on market 102 days — a 9% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $188k (21.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#119 in TX, #3,771 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Mcallen ISD (urban): math 34% / reading 45% proficiency, ranked #440 of 826 in TX (top 53%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Lucile Hendricks El (math 37% / reading 42%, grade F, #1,545 of 4,322 statewide, top 38%, 423 students, 71% FRL); Michael E Fossum Middle (math 40% / reading 45%, grade D-, #553 of 1,662 statewide, top 34%, 780 students, 59% FRL); Rowe H S (math 25% / reading 53%, grade F, #859 of 1,632 statewide, top 53%, 1,944 students, 74% FRL) — zoned schools average 68% FRL vs 50% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.7% of price.
• Market conditions: Rents rising (+2.6%/yr); 898 active listings in the ZIP; 36 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 58% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 7 sale attempts since 9y ago; this cycle's ask has dropped $15k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.8% vs local median 3.7% in McAllen — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 102 days. Have you received any prior offers? Is the seller open to a 22% 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?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.