Hickory III A Plan

Covington, LA 70435

$384,990F

5 bd · 3.0 ba · 2,720 sqft · Built — · SingleFamily · Active · 206 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,314/mo
• Mortgage (P&I): −$2,505
• Tax + insurance: −$796
• HOA: −$0
• Vac / Maint / Mgmt: −$486
• Net cashflow: $-1,473/mo
• Annual: $-17,674/yr
• Cap rate: 2.59%
• Cash-on-cash: -13.22%
• DSCR: 0.41
• 1% rule: 0.48%
• Cash to close: $133,732

Investor read

• This is a 5-bed/3.0-bath single-family listed at $385k. Condition is rated good.
• At list price, monthly cash flow is $-1k ($-18k/yr) — negative.
• To cash-flow at today's rent, offer at most $264k (31.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $231k (39.9% below list).
• It's been on market 206 days — a 12% lower offer ($339k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $231k (39.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#17 in LA, #3,876 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• St. Tammany Parish (suburban): math 43% / reading 55% proficiency, ranked #11 of 98 in LA (top 11%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Covington Elementary School (math 52% / reading 52%, grade C-, #108 of 646 statewide, top 18%, 628 students, 59% FRL); Pine View Middle School (math 20% / reading 37%, grade F, #119 of 218 statewide, top 57%, 635 students, 62% FRL); Covington High School (math 32% / reading 44%, grade F, #90 of 265 statewide, top 34%, 1,660 students, 46% FRL) — zoned schools average 56% FRL vs 40% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 421 active listings in the ZIP; solid renter incomes; 1,064 units permitted in St. Tammany Parish in 2024 (0 in 5+ unit buildings).
• St. Tammany County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 2.6% vs local median 3.8% in Covington — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 34% of the median local income ($81k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 206 days. Have you received any prior offers? Is the seller open to a 40% 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.