I am 24 years old & reside in New Olreans,LA. I have about $20,000 to play with, middle credit score of 710(surprisingly), and Im a renter. I have always been fascinated with REI, but never had the capital to get started.
So the other day I get a bug up my butt(not literally) and fill out a pre-approval application with a mortgage company just to see where I stand at. Well low and behold the bank approves me for $135,000 90% LTV on an investment rental property (condo). The loan advisor said I should purchase my own property first than do an investment later.
If I purchase my personal property first, Im worried about how long it will be till I am able to get an investment property. What if I decided to purchase the investment property first would I still qualify for a first time buyer on my presonal property?
Now as many of you know most of nola was flooded. Which offers some great flip opportunities in good neighborhoods. But there are some uncertainties with how the city will be rebuilt. This area peaks my interest because of the great reward, but it just seems to much of a risk right now. Add to the fact some properties are inflated do to high demand low supply. What will happen when the supply comes back?
The condos im looking at were closer to the Mississippi River levee and were not damaged by Ms. Katrina. Just to give you an idea the condos are on the Mardi Gras parade routes. They seem to be reasonably priced compared to pre-katrina prices.
So the reason I post this is to get some opinions. I have always had the mindset of flipping, but I think renting is the safer bet right now. If you were in my shoes what would you do?
Just to preface. I lived in “Nawlins” for almost 2 years and absolutely loved the city. One of the best cities i ever visited none the less lived in. I actually live in metarie right by west end.
A couple of suggestions. The way I got started was bought a primary residence lived in it for a while and then moved on to another house and used the first property as a rental. This is an option because lenders are more willing to let you put less down than the standard 20% for an investment property. You could try a duplex and do a owner occupied situation also where you live there and rent out the other half. Some are against this because it puts you and the tenant it too close of proximity. It’s your call to what you feel comfortable with.
I would hold off on doing anything for a little while though. I haven’t live there for about 3 years, but from what i know and hear, the rental market is insane right now. Trying to buy a rental would be a big mistake, unless you can find a great deal. I know if i owned rentals that were still functional this is the time I would want to hold all of them.
A safe bet is always around the garden district, I had some friends that lived in an apartment right on St. Charles seemed like a great place for a rental. I would feel safe flipping a property in the garden district. From what i understand it wasn’t that damaged by Katrina either.
The only thing is what are you going to do about help and supplies?
What I would do is Flip a property and maybe one more after that depending on carrying costs and supplies ect… and just rent for the time being. Let NO rebuild, see where emerging sub markets are coming up and then buy a primary residence in one of them.