One of the things I enjoy most about working with real estate investors is seeing what actually happens after a deal closes.

Not the theoretical examples you see in presentations or courses, but the real decisions investors make when they buy, renovate, refinance, and hold a property.

Recently, Dillon King from our team sat down with one of our buyers, John Cardinale to walk through a duplex he purchased through Home Buyer Louisiana near the Fairgrounds in New Orleans.

John owns about 35 rental units and focuses primarily on long-term rental properties.

In the conversation he breaks down the numbers on the deal, how he financed it, what surprised him during the renovation, and why he still considers it a good investment even though the property currently has slightly negative cash flow.

The Deal Numbers

Here are the key numbers from the project.

• Purchase Price: $162,000
• Renovation Budget: $54,000
• Total Invested: $216,000
• Appraised Value After Renovation: $350,000
• Cash Pulled Out at Refinance: Approximately $20,000
• Current Cash Flow: About -$200 per month

At first glance, some investors might look at the negative cash flow and question the deal.

But experienced investors tend to look at deals through a broader lens.

Why the Investor Still Likes the Deal

Even though the property is slightly negative today, John still considers it a solid long-term hold.

There are several reasons for that.

First, the property is located near the Fairgrounds in New Orleans, an area with strong rental demand and a large base of long-term tenants.

Second, the renovation created significant equity. Even after refinancing, the property still has a strong equity cushion.

Third, part of the negative cash flow is temporary due to a tenant situation that limited the rent increase on one of the units. If the tenant eventually moves and the unit is rented at market rates, the property would likely become cash flow positive.

In other words, the fundamentals of the deal remain strong even if the short-term numbers aren't perfect.

ow the BRRRR Strategy Played Out

This deal followed the classic BRRRR strategy, which stands for:

Buy
Renovate
Rent
Refinance
Repeat

The investor used hard money financing to purchase and renovate the property.

The renovation was completed in roughly 90 days, after which the property was refinanced based on the new appraised value.

Because the refinance was based on the improved value of the property, the investor was able to recover his original capital and pull out about $20,000 in cash.

That capital can now be recycled into future investment opportunities.

Why the 1% Rule Doesn't Really Work in New Orleans Anymore

One of the interesting parts of the conversation was John's discussion about underwriting deals in the New Orleans market.

Historically, many investors used the 1% rule, where the monthly rent should equal roughly 1% of the purchase price.

But markets change.

In New Orleans, insurance costs increased significantly after the hurricanes of 2021, which changed the math for many investors.

Today, many investors target 1.5% to 2% rent ratios, particularly when buying multifamily properties like duplexes.

As a result, underwriting assumptions have shifted across the local market.

A Reminder That Deals Rarely Go Exactly to Plan

Even experienced investors encounter surprises during renovation projects.

In this case, a layout issue during the renovation forced one of the units to be reconfigured in a way that temporarily reduced rental income.

Instead of overreacting, John simply absorbed the short-term impact and focused on the long-term fundamentals of the deal.

As he said during the interview:

“In the end it's just $200.”

When you operate a portfolio of properties, small fluctuations like that are simply part of the business.

Watch the Full Conversation

If you'd like to hear the investor walk through the full deal, including the financing, renovation timeline, and refinance strategy, you can watch the conversation here:

What This Deal Teaches About Rental Property Investing

One of the reasons I like sharing conversations like this is because they show how experienced investors actually think about deals.

Rather than focusing on a single metric, investors often evaluate properties based on several factors:

• equity vs cash flow
• short-term performance vs long-term potential
• financing strategy
• portfolio diversification
• location and rental demand

Deals rarely look perfect on paper, but experienced investors learn how to balance multiple factors when making decisions.

Final Thoughts

There are plenty of simplified examples of real estate investing online.

What I find more valuable are conversations with investors who are actively operating portfolios and making real-world decisions.

This duplex deal near the Fairgrounds in New Orleans is a good example of how experienced investors approach:

• BRRRR strategy execution

• refinancing rental properties

• evaluating equity vs cash flow

• managing surprises during renovation projects

Question for Other Investors

I'm curious how other investors think about deals like this.

Would you hold a property that is about -$200 per month today but has strong equity and long-term fundamentals?

Connect with me

If you invest in Greater New Orleans, Baton Rouge, the Northshore, Lafayette, or the Mississippi Gulf Coast, feel free to reach out.

We regularly work with investors looking for off-market properties and redevelopment opportunities in these markets.