Encino Plan

McAllen, TX 78504

$257,990D+

3 bd · 2.0 ba · 1,740 sqft · Built — · SingleFamily · Active · 521 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,451/mo
• Mortgage (P&I): −$1,407
• Tax + insurance: −$447
• HOA: −$0
• Vac / Maint / Mgmt: −$515
• Net cashflow: $82/mo
• Annual: $983/yr
• Cap rate: 6.66%
• Cash-on-cash: 1.31%
• DSCR: 1.06
• 1% rule: 0.91%
• Cash to close: $75,121

Investor read

• This is a 3-bed/2.0-bath single-family listed at $258k. Condition is rated excellent.
• At list price, monthly cash flow is $82 ($983/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $245k (5.0% below list).
• It's been on market 521 days — a 12% lower offer ($227k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $227k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#119 in TX, #3,771 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Edinburg CISD (urban): math 20% / reading 34% proficiency, ranked #699 of 826 in TX (top 85%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: R C Flores-Mark A Zapata El (math 38% / reading 38%, grade F, #1,709 of 4,322 statewide, top 40%, 521 students, 80% FRL); Elias Longoria Sr Middle (math 16% / reading 35%, grade F, #1,236 of 1,662 statewide, top 76%, 804 students, 82% FRL); Edinburg North H S (math 29% / reading 38%, grade F, #1,011 of 1,632 statewide, top 63%, 2,672 students, 83% FRL) — zoned schools average 82% FRL vs 62% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.6%/yr); 1064 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 93d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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 6.7% vs local median 3.9% in McAllen — 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.
• This rent runs 36% of the median local income ($82k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 521 days. Have you received any prior offers? Is the seller open to a 12% 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.