New Orleans Live-in-Flip Airbnb Cash flow Property

[James Antin]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in New Orleans.

Purchase price: $161,000

Cash invested: $10,000

First investment was an owner/occupant duplex in New Orleans. Rented out the owner's unit via a month-to-month lease immediately, while I lived and renovated/updated the renter's unit. Took me 2 1/2 months to complete renovations/updates on renters side. Month- to-month tenant moved out, as I moved into owner's side, and opened up Short Term Rental on the renter's side.

Property has been cash flow positive from the first month of purchase. Cash flow is ~ $1,100 per month after mortgage and STR expenses.

Living for free, making an extra $1,000 on top of normal income, and learning from mistakes to do better on next investment.

How did you find this deal and how did you negotiate it?

Made an offer before the property was listed on MLS via my agent's contacts.

How did you finance this deal?

First time home buyer loan through conventional loan product via Iberia Bank. 5% down. 4% rate @ 30 yr fixed.

How did you add value to the deal?

Found, evaluated, financed, rehabbed, designed, and managed property.

What was the outcome?

I am currently listing the home for sale, and if I get a good offer I will sell for nice gain (avoiding capital gains tax, as the property was my primary residence for > 2 years.) If I don't get what I'm asking for, then I am going to rent the owner's unit out long term, and keep the renter's unit as a short term rental.

Lessons learned? Challenges?

Do more due diligence for what your neighbors are like prior to ask, and make sure the risk is factored into offer decision. I factored neighboorhood into offer evaluation, but I did not do specific due diligence int neighbors. The neighborhood is a mix of families, new constructions, section 8, etc. (lower/middle income neighborhood). However, my direct neighbors ended up being section 8, which may create issues for reselling home for what it should be worth otherwise.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

John Hendrix in New Orleans is a great agent/investor/property manager/developer. I use him for all my real estate needs currently.