New Investor in Baton Rouge, LA Market - Few Questions

[Kyle Coleman]

Morning BP,

I'd like to thank all of the regulars for their insight, it really does help newbies like myself get a foothold on a strategy for investment. 

I decided that I'm going to start off with the 'BRRRR' strategy. I liked the idea of buy and hold rentals (and my family has been in the business for awhile), but didn't like the idea of saving 2-3 years per unit. I'm in south Louisiana, which was obviously affected by the "500 year flood", meaning there are a lot of flooded and gutted properties selling for as little as 15k. However, I've never done a full rehab. These units have frames, half of their drywall in most cases and a roof. Typically everything else needs to be redone, sometimes electrical is unaffected.

First question, is it a good idea to try to tackle my first investment property as a total rehab? Assuming a 1500 sq ft SFH, does anyone have a ballpark idea of cost of a full renovation? I know it's going to vary greatly depending on location, etc.

Second question, I'm working with a small local bank that told me since I don't own a primary residence (sold it last month due to unforeseen personal circumstances (ie divorce)) that they have no problem underwriting the loan as a primary residence that I can just "change my mind later" and not move in.  They claim they do it all the time and that it won't interfere with buying an actual primary residence later down the road. With that being the case, they're telling me I can put 5% down and lock in a lower rate, I feel like if this was true, every buy and hold investor on the planet would rent their primary and lock in low rates and very little money down to REFI later.  Can someone tell me why this is too good to be true? There has to be a catch. 

Last question - while I don't intend on doing this, has anyone in this area had luck with flipping flooded properties? I kind of feel like people are scared to buy homes that were in flooded areas (although there were a lot). These properties are currently going for pennies on the dollar, homes that were valued at 150k+ are selling for 45k so people can get out of their loans and start over. 

Thanks so much for any information you guy can give, ya'll are awesome.