The Coves 2 Plan

Weslaco, TX 78596

$140,000D

2 bd · 2.0 ba · 920 sqft · Built — · Townhouse · Active · 669 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,201/mo
• Mortgage (P&I): −$753
• Tax + insurance: −$239
• HOA: −$21
• Vac / Maint / Mgmt: −$252
• Net cashflow: $-64/mo
• Annual: $-772/yr
• Cap rate: 5.76%
• Cash-on-cash: -1.92%
• DSCR: 0.91
• 1% rule: 0.84%
• Cash to close: $40,189

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $140k. Condition is rated excellent.
• At list price, monthly cash flow is $-64 ($-772/yr) — negative.
• To cash-flow at today's rent, offer at most $134k (4.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $120k (14.2% below list).
• It's been on market 669 days — a 12% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $120k (14.2% below list) — sets the bar for 1% rule.
• In year one you build about $154 of equity ($993 loan paydown + $-839 appreciation (-0.6% local appreciation)).
• Location reads 72/100 on livability (#277 in TX) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D+, crime F, amenities F.
• Weslaco ISD (suburban): math 23% / reading 31% proficiency, ranked #705 of 826 in TX (top 85%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Dr R E Margo El (math 17% / reading 22%, grade F, #3,583 of 4,322 statewide, top 86%, 914 students, 87% FRL); Armando Cuellar Middle (math 22% / reading 31%, grade F, #1,200 of 1,662 statewide, top 73%, 626 students, 88% FRL); Weslaco East H S (math 24% / reading 26%, grade F, #1,250 of 1,632 statewide, top 77%, 2,004 students, 86% FRL) — zoned schools average 87% FRL vs 59% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 1019 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 34d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% 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.
• Cap rate 5.8% vs local median 3.7% in Weslaco — 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 669 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.