425 S Reynolds St

Rio Hondo, TX 78583

$195,000D-

3 bd · 1.0 ba · 1,290 sqft · Built 1979 · SingleFamily · Active · 68 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,259/mo
• Mortgage (P&I): −$1,023
• Tax + insurance: −$430
• HOA: −$0
• Vac / Maint / Mgmt: −$264
• Net cashflow: $-458/mo
• Annual: $-5,493/yr
• Cap rate: 3.48%
• Cash-on-cash: -10.06%
• DSCR: 0.55
• 1% rule: 0.65%
• Cash to close: $54,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $195k.
• At list price, monthly cash flow is $-458 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $114k (41.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $126k (35.4% below list).
• It's been on market 68 days — a 6% lower offer ($183k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (41.5% below list) — sets the bar for cash-flow.
• In year one you build about $14k of equity ($1k loan paydown + $13k appreciation (6.6% local appreciation)).
• Location reads 71/100 on livability (#305 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime C-, amenities F, commute F.
• Rio Hondo ISD (town): math 15% / reading 28% proficiency, ranked #769 of 826 in TX (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Rio Hondo El (math 12% / reading 17%, grade F, #4,048 of 4,322 statewide, top 95%, 624 students, 86% FRL); Rio Hondo Middle (math 14% / reading 29%, grade F, #1,378 of 1,662 statewide, top 83%, 488 students, 91% FRL); Rio Hondo H S (math 22% / reading 42%, grade F, #1,044 of 1,632 statewide, top 66%, 507 students, 83% FRL) — zoned schools average 87% FRL vs 23% district-wide (64 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 99 active listings in the ZIP; 2,326 units permitted in Cameron County in 2024 (503 in 5+ unit buildings).
• Cameron County population projected at +3% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• By year 3, paydown + projected appreciation supports a ~$35k 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→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 68 days. Have you received any prior offers? Is the seller open to a 41% concession, seller financing, or rate buy-down credit?
• Built in 1979 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.