523 N 12th St

Donna, TX 78537

$160,000D

4 bd · 2.0 ba · 1,196 sqft · Built 2022 · Land · Pending · 236 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $856/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$132
• HOA: −$0
• Vac / Maint / Mgmt: −$180
• Net cashflow: $-296/mo
• Annual: $-3,546/yr
• Cap rate: 4.08%
• Cash-on-cash: -7.92%
• DSCR: 0.65
• 1% rule: 0.53%
• Cash to close: $44,800

Investor read

• This is a 4-bed/2.0-bath land listed at $160k.
• At list price, monthly cash flow is $-296 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $108k (32.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $86k (46.5% below list).
• It's been on market 236 days — a 12% lower offer ($141k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $86k (46.5% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 54/100 on livability (#1,411 in TX) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A; Watch: crime F, amenities F, commute F.
• Donna ISD (suburban): math 11% / reading 18% proficiency, ranked #821 of 826 in TX (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Le Noir El (math 17% / reading 27%, grade F, #3,333 of 4,322 statewide, top 80%, 413 students, 87% FRL); W A Todd Middle (math 9% / reading 22%, grade F, #1,556 of 1,662 statewide, top 94%, 693 students, 92% FRL); Donna H S (math 16% / reading 21%, grade F, #1,436 of 1,632 statewide, top 88%, 2,095 students, 92% FRL) — zoned schools average 91% FRL vs 48% district-wide (42 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 327 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% 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.
• 2 sale attempts; this cycle's ask has dropped $35k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 3, paydown + projected appreciation supports a ~$43k 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; major 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 4.1% vs local median 2.7% in Donna — 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

• 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 236 days. Have you received any prior offers? Is the seller open to a 47% concession, seller financing, or rate buy-down credit?
• 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 F-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?
• 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.