Multifamily Real Estate Questions

[Carlos Quiros]

Hello All-

My wife and I have rentals in Ohio but she is from Louisiana and the area tugs at her heart so we are looking for multifamily in the area. We do have a family friend born and raised in NOLA that can be our boots on the ground. 

My questions are looking at real estate it looks like things sit here quite a bit 30-60+ days. Can anybody give us any insight as to why? Also is insurance premiums eating up cash flow? 

What is a typical insurance cost for a duplex/triplex. 

We are looking for either a duplex/triplex so that we can have one unit empty (triplex) when we come visit.

Any insight would be helpful.

Carlos

[Braden Smith]

Quote from @David St. Pé:

Quote from @Braden Smith:

Quote from @David St. Pé:

Quote from @Braden Smith:

I am located in New Orleans. Insurance here is a nightmare, putting a real damper on the market. Premiums have doubled, tripled, and even quadrupled for some. 

I have a podcast on the local real estate market in New Orleans. Check out this episode on insurance:  Episode 22: What in the world is going on with homeowners insurance in Louisiana?

Hi Braden,

I am looking at some duplex/triplex in uptown.  Insurance premiums aside, how do you feel about investing in NO generally? 

The market is tough here. Construction costs are up about 40% over the last 4 years. Insurance costs are through the roof. Add in the high interest rates on construction loans and mortgages, and it all makes for a difficult market for real estate investing. Those having some success with REI in the New Orleans area are getting deals direct to seller and using creative REI techniques.

 Hi Braden,  Thanks for the reply.  Interest rates & constructions costs are up across the country.  Nobody has a crystal ball but, I was wondering how you feel about NO/uptown 3-5 year outlook relative to appreciations & rents.

Currently, we are seeing inventory rise faster than we are closing sales. Home for sale is up about 20% and closed sales are down about 24%. If this trend continues as we move towards the end of the year I think we will see more price drops than we already are. Sales volume in the GNO area typically peaks in June, and then demand begins to drop. It usually bottoms out around January each year.

Months of supply for all dwelling types in the GNO area is at 5.7 which is the highest it has been since about 2014. I think it will get up above 6 months soon and may rise even further towards the end of the year pushing us into buyer market territory where prices fall.

There are more available rentals on the market than there would normally be at this time of year.