839 La Cir

Mercedes, TX 78570

$149,000D-

3 bd · 2.0 ba · 1,624 sqft · Built 1990 · SingleFamily · Active · 217 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,082/mo
• Mortgage (P&I): −$781
• Tax + insurance: −$387
• HOA: −$0
• Vac / Maint / Mgmt: −$227
• Net cashflow: $-314/mo
• Annual: $-3,770/yr
• Cap rate: 3.76%
• Cash-on-cash: -9.04%
• DSCR: 0.60
• 1% rule: 0.73%
• Cash to close: $41,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $149k.
• At list price, monthly cash flow is $-314 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $93k (37.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $108k (27.4% below list).
• It's been on market 217 days — a 12% lower offer ($131k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $93k (37.2% 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 2.6% of price.
• Market conditions: 390 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% 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.
• By year 5, paydown + projected appreciation supports a ~$34k 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→24/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 217 days. Have you received any prior offers? Is the seller open to a 37% 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?
• 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?