2506 Retama Ave

Hidalgo, TX 78557

$265,000D+

3 bd · 2.0 ba · 1,864 sqft · Built 2014 · SingleFamily · Pending · 93 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,869/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$672
• HOA: −$0
• Vac / Maint / Mgmt: −$393
• Net cashflow: $-585/mo
• Annual: $-7,022/yr
• Cap rate: 3.64%
• Cash-on-cash: -9.46%
• DSCR: 0.58
• 1% rule: 0.71%
• Cash to close: $74,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $265k.
• At list price, monthly cash flow is $-585 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $162k (39.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $187k (29.5% below list).
• It's been on market 93 days — a 9% lower offer ($241k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $162k (39.0% below list) — sets the bar for cash-flow.
• In year one you build about $28k of equity ($2k loan paydown + $26k appreciation (10.0% local appreciation)).
• Location reads 68/100 on livability (#488 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: schools D-, amenities F, commute F.
• Watch-outs: property tax is 2.5% of price.
• Market conditions: 98 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 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 2, paydown + projected appreciation supports a ~$46k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 97% 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.

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 93 days. Have you received any prior offers? Is the seller open to a 39% 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 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.