The purchase price is $6M.Deal Structure (Proposed)Equity: $800k–$1.2M (I already have $400k committed)Seller Financing: Remainder (~$5.2M–$4.8M) at 6% interest-only with a 5-year balloonInvestor Terms: Offering 8% preferred return + equity participationFinancial SnapshotRevenue: ~$780k/year (3-year average)Operating expenses: ~$300k/yearNormalized NOI: ~$450k–$480kWith seller note + investor pref, the deal is tight at current occupancy (~43%), but becomes strongly cash-flow positive once occupancy improves back to historical levels (~60–65%).The OpportunityHistorical occupancy was ~65%, but recently dipped to ~43% due to management/marketing issues.Strong potential to restore performance through better operations and marketing.New Orleans remains a top U.S. tourist destination, supporting long-term demand.My AskI already have $400k committed from an investor (10% equity).

Quote from @Richard Dickson: Hey everyone,Lately, I’ve been having a few conversations with note holders who are exploring exit options — either from performing or sub-performing notes.

Any "improvements" they make stay with the house, of course.

Their split was $130k improvements and $220k land.

Quote from @Charles Kennedy: Hey BP community,I’ve been spending more time lately digging into mortgage notes—both buying and selling—and I’m curious how others in this space are approaching it.A couple of things I’ve been thinking about:Do you prefer performing or non-performing notes, and why?

Example:If you sell now, you lose $40,000 in REALTOR fees plus the improvements you made.If you keep it, you lose $4,000 a year. 

The adjusted cost basis would be your purchase price, plus capital improvements, minus depreciation, like what @Josh St Laurent said.

Would you pay this person for 3 hours of work if they performed this particular task for 3 hours?

Should the seller be able to print a report from Airbnb and Vrbo for each unit so I can see how they’ve performed?

If you can buy below market value, then put in modest improvements (paint, flooring, fixtures, maybe some minor updates on kitchens or baths), you can often increase rents enough to improve cash flow meaningfully.