new orleans - looking for something specific

Joshua B. · 2019-03-11T03:35:07-07:00

I am looking for a specific type of property in the New Orleans area, reaching out to the forums if anyone has a highly recommended and great realtor that can help find something like this. Looking for a single- or double-unit place that can double as an Airbnb. I travel a lot for work and plan to use the property when I am in town for business that I plan to be conducting in the New Orleans area. A couple requirements that I am thinking for the place:1) single or two bedrooms. Can be a one- or two-unit place.2) Location - looking for out of flood areas, and a nice neighborhood. Looking for something that can either be renovated to a very nice place or something that is already turn key. Basically an “A” - or a “C”/”B” property that can become an A with some work. Location is very important here. 3) Security is important as I will be out of the area at times and I will be renting the unit on AirBnb. This comes back to location, but also may make sense to find something like a flat with a full-service entrance and 24/7 security or a nice duplex in a great area. However, I know that sometimes some of these type of places don’t allow Airbnb. 4) Looking to use VA financing - so a realtor with experience or connects in this is important. 5) flexible on timeline. Optimal goal would be to be close to closing on a property by Jul2019. Thanks in advance to anyone who wants to weigh in on the NOLA area or has a great point of contact to recommend.

James Martin

Metairie, LA · Member since 2016 · 67 posts · 41 votes

7y

REally difficult to make Air BNB work here now. If you aren't living in the unit (or in one side of the unit), or if the building isn't zoned commercial, you are really going to have trouble with AirBNB.

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Braden Smith

Investor · New Orleans, LA · Member since 2012 · 969 posts · 747 votes

7y

Hi @Joshua B.. I am both a real estate investor and a licensed realtor in New Orleans. I have been licensed since 2013 and I was investing prior to that. I know the New Orleans real estate market quite well and can provide some insight for you, as follows:

The city of New Orleans is going through some major changes with the STR rules and regulations. The city council instituted a 9 month moratorium in order to conduct a study, and then issue new rules and regulations for STRs in Orleans parish. During this moratorium they will not issue any new STR licenses, nor will they renew any that expire during the moratorium. I believe this moratorium ends in May 2019. The unofficial word on the street is that the new rules/regulations will only allow STRs with a homestead exemption, meaning an owner lives on the premises and uses the property as their primary residence. This seems to be the trend with STRs in most major metro areas across the country.

Everything in New Orleans is in a flood zone. The city is below sea level and basically a giant bowl, with levees surrounding it. There are more and less favorable flood zones, but everything is in a flood zone. But even then, the elevation of the particular property as it compares to the base flood elevation for the neighborhood is what will determine the cost of the flood insurance.

Most condo and apartment buildings do not allow STRs, so a unit with a full service entrance and 24/7 security would be difficult to do legally.

Using a VA loan will require that the property be in mint condition, as the VA is rather strict on the condition of the property since they are providing 100% financing. So a property that needs work wouldn't be likely to work with a VA loan.

See here for a recent forum post on STRs in NOLA: Airbnb - New Orleans

See the following links for more info:

New Orleans City Council issues temporary ban on most short-term rental permits

Councilwoman pushes permanent restrictions for short-term rentals

New proposals in New Orleans for short-term rentals

Most New Orleans short-term rentals could be linked to homestead exemption holders

Preliminary vote on New Orleans short-term rental changes delayed; a look at new timeline

If you have any questions I can answer, please feel free to reach out!

3 Reply

Mike Wood

Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes

7y

@Joshua B. My understanding is a VA loan will require you to have residency at the property. If you dont plan on living there full time (which is what you described), then that will be an issue. Also, as others have said, short term rentals (STR's) are being heavily regulated by the city, and if your not a owner occupant with a homestead exemption, you can almost forget about doing it legally.

In New Orleans, I dont think there is such a thing as a C/D property that can be made into an A property.

To clarify what @Braden Smith stated, not all properties in New Orleans is in a special flood zone that required flood insurance. A decent amount of the city is now Flood Zone X, which does not require flood insurance. Its still a flood zone though, but pretty cheap to insure (most of my $250k policies for 2 unit buildings are around $650/year.) if you choose to.

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Greg JeanfreauPro Member

Real Estate Agent · New Orleans, LA · Member since 2015 · 146 posts · 127 votes

7y

@Mike Wood They just bumped the X flood premium for doubles to $705, FYI.

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Joshua B.

OP

Member since 2019 · 20 posts · 5 votes

7y

@Braden Smith - excellent post. What exactly is a homestead exemption? Seems like this should be something that I would plan to use if its not to difficult to obtain. Are you interested in further discussing the chance to work with me as a realtor on this? If so PM and Ill get back to you.

As you mentioned I do plan to use the residence as my primary, as may be needed for VA - thanks for the reminder @Mike Wood. However that does not change the fact that I will be out of the area at times and would be interested in setting up a STR if possible. If not possible I'd still be looking to purchase a place that I could set up for a LTR in the future after I lived in it and upgraded it modestly.

Do you know if some condo / apartments do not allow LTRs? If so this may be a good option.

I've heard the Garden District is a good area. I am looking for something nice or ability to update to A / reduced chance for flood / location is top priority. I am seeking to avoid the bourbon street area.

I've used VA in the past and near mint is a bit of a misnomer. Usually as long as there aren't any significant structural or major problems with the residence VA funding is simple to secure.

@Mike Wood - thanks for the point about flood zone x areas. Probably what I'll be optimally trying to target.

Lastly - anyone have a great realtor to recommend other than Braden?

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Braden Smith

Investor · New Orleans, LA · Member since 2012 · 969 posts · 747 votes

7y

@Joshua B. I will shoot you a PM.

The homestead exemption is a tax exemption from state and property taxes on the first $75,000 of the value of your main residence and applies to all homeowners. To file for a Homestead Exemption, the applicant must appear in person at the Assessor's Office (with the exception of Ascension Parish residents) and bring the following:

Proof of ownership - recorded Act of Sale or Warranty Deed
Driver's License/ID
Recent unpaid bill(s) for the property addressed to the owner (*Note: some parishes do not accept Sewerage & Water Board bills as proof of residency).

After you have initially filed for your Homestead Exemption, each year thereafter, you will receive a receipt in the mail showing your Homestead Exemption is permanent. You will no longer be eligible for the homestead exemption on that home should you move to another location or sell your house.

Many condo and apartment buildings restrict LTRs, and some ban them outright. Often times the number of LTRs are limited to a percentage of the total number of units in the building and if that number is reached there is a waiting list.

We have both the Garden District and the Lower Garden District... both are nice and can be quite expensive.

The Department of Veterans Affairs utilizes a series of Minimum Property Requirements, or MPRs, that a home must meet in order to qualify for a VA loan. In my experience the strictness of these requirements depends on the appraiser you get... I have seen some where they wouldn't approve the loan due to very minor things such as peeling/chipped paint and missing window screens. Specific requirements can vary based on the lender, local housing codes, VA guidelines and more.

The "toughness" of any particular appraisal also has a lot to do with a lender's own policies. The VA appraisal is important to a lender. Properties that don't meet all VA criteria are rejected by the program and can put a lender at risk. In issuing a VA loan, a lender can choose to add any number of property restrictions. Some lenders are extremely strict, while others are more accommodating.

For example, while the VA allows mobile home purchases through the VA loan program, many lenders refuse to extend financing on these properties. If a homebuyer wants to use their VA loan on a mobile home, they'll need to ask specifically whether their lender of choice offers this type of financing.

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new orleans - looking for something specific - & a great realtor

new orleans - looking for something specific - & a great realtor

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