I have been spending time looking for property and found an interesting place in New Orleans. The place is currently considered a Duplex with 2 shotgun style layout on the upstairs of the property. The downstairs used to be 2 separate units but it was flooded (I think Katrina) and it has been gutted to the studs.
I am wondering is it possible to rent out the 2 sides, say that i am living in one of the bottom units and work on fixing the bottom place.
Any tips or help is appreciated. This would be my first property
Living in one of the units while completing the repairs definitely has some perks. One of the biggest of these perks is the lower interest rate you can get if one of the units is owner occupied. The only issue is with the bottom units being gutted many banks will have a problem with this but since it is separate from the top and I'm assuming the top half is being rented now you may be ok. My advice is get a good agent if you haven't already and they should be able to get you in touch with someone who can answer those questions.
@Joshua Nguyen You need to check the current property zoning. It sounds like you are talking about a old fourplex that currently only has two units being used.
If the property is only now zoned for only two or less units (the finished upstairs units), then it is very unlikely the lower units will be able to be rebuilt.
This assumes that the lower space was not being actively being used (finished with utilities). This means that the property has lost its grandfathering status with the city for the extra units and will not be able to be rebuilt as separate units. Also, the lower units may be below the area's base flood elevation, which would prohibit you from rebuilding them unless you somehow raise the house.
Thank you for the information - I will bring this up with my current agent and lender. Looking at the properties around it, I do believe I will have to raise it. I went to look at it again over the weekend and noticed a tilt to the structure. This may be more work than I can imagine.
the top floors are not being rented out currently. Initially it was marked as 1 unit occupied but not anymore.
@Joshua Nguyen If this property is in Midcity, I might know of it. If its the one I am thinking, in addition to not being able to rebuild the lower units due to zoning, its also very heavily termite damaged.
@Joshua Nguyen You can also easily find the properties zoning at the citys website property.nola.gov. For an explaination of each zoning category, you can find that in the CZO at the citys website czo.nola.gov.
@Mike Wood Thank you for the resources! My agent also told me to ask my lender about different loans or how I will purchase the property. I am still looking into my options and looking for a contractor to get an idea on the repairs that would be needed and what is feasible.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.