706-708 Desire St

New Orleans, LA 70117

$375,000D+

2 bd · 2.0 ba · 1,512 sqft · Built 1888 · MultiFamily · Pending · 91 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,142/mo
• Mortgage (P&I): −$1,967
• Tax + insurance: −$557
• HOA: −$0
• Vac / Maint / Mgmt: −$660
• Net cashflow: $-42/mo
• Annual: $-498/yr
• Cap rate: 6.37%
• Cash-on-cash: 0.29%
• DSCR: 1.01
• 1% rule: 0.84%
• Cash to close: $105,000

Investor read

• This is a 2 × 1-bed/1-bath units multifamily listed at $375k.
• At list price, monthly cash flow is $-42 ($-498/yr) — negative. Per door: $-21/mo.
• To cash-flow at today's rent, offer at most $368k (2.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $314k (16.2% below list).
• It's been on market 91 days — a 9% lower offer ($341k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $314k (16.2% 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 $11k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#3 in LA, #1,383 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: crime C-, employment D.
• Orleans Parish (urban): math 11% / reading 27% proficiency, ranked #69 of 98 in LA (top 70%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Benjamin Franklin Elem. Math And Science (math 12% / reading 23%, grade F, #479 of 646 statewide, top 75%, 747 students, 98% FRL, charter) — zoned schools average 98% FRL vs 68% district-wide (30 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $66/mo; built in 1888 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.5%/yr); 587 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 710 units permitted in Orleans Parish in 2024 (244 in 5+ unit buildings).
• Orleans County population projected at +61% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 24y ago; this cycle's ask has dropped $50k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $286k; 31% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major flood risk; severe wind risk, 99% 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.
• Cap rate 6.4% vs local median 4.4% in New Orleans — 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.
• At $3,142/mo this rent would consume 82% of the median local household income ($46k/yr) (locally 1988% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 91 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1888 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.