Tim, Home Buyer in California

Does Baton Rouge's real estate market warrant a look from small investors?

Asked by Tim, California Sat Jun 16, 2007

Can one purchase a single-family or condominium in Baton Rouge and realize a positive cash flow with 20% down? What is the state of the downtown condo market? Too many conversions? Is River Place or River View a better investment?... or a new KB home outside of the city?

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Answers

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Why would you want to put down 20% on one investment? Sounds risky. Your goal should be doubles or more, up to 4 plex to keep the insurance down, hold it for a few years as rentals.

Forget a new KB home as investment grade...the money is already priced into that home.

What kind of Return on Investment are you looking for? 8%? 12%? Be careful with the condo's....those condo fees can eat you alive...but with the right location may be good investment if you can clearly get the rents.
Web Reference: http://iansellsnola.com
1 vote Thank Flag Link Thu Aug 30, 2007
Charles, Days on Market. Days on market is becoming a larger number. Homes that are priced right are not moving before the listing agreement is up. The only changes in price on mls are price reductions. When I say saturated, I am talking about home sales, not rentals. If you are buying for investment at this time it should be to rent and not flip. It may be a very good time to buy rental property. Sorry for the confusion.
Web Reference: http://carriecrowell.com
1 vote Thank Flag Link Thu Aug 30, 2007
HI Carrie
My single family investment properties have been renting out quite quickly in Livingstone Parish. I am also looking in Ascension Parish. What makes you say you're saturated at this point?
Thanks
1 vote Thank Flag Link Wed Aug 29, 2007
Tim,
To answer your first question I would suggest that condominiums nearer the college are the better buy. There have been some recent renovation in the downtown area....but I would still say the best positive cash flow would be around the university.

In Riverview you can get condos from 114K to 199K It depends on what you are looking for. I am not familiar with River Place. Neither did it pull anything from an MLS search. KB home and D R Horton homes have both come to the Baton Rouge area since the storms. They have both been represented by agents in our office! We are currently saturated with new construction. That has been a huge factor in our market slowing. It has really been more prominent in the outer lying areas of Baton Rouge like Ascension and Livinston Parishes. If you have any more questions feel free to ask. I work out of the Baton Rouge area. Good luck with your quest. Carrie
Web Reference: http://carriecrowell.com
1 vote Thank Flag Link Tue Aug 21, 2007
The answer Tim is most definitely YES! However, I wouldn't look exclusively downtown or at condos. While the market downtown is quite robust, more so than other areas, most condos downtown are a bit pricey for investing for immediate positive cash flow.

River Place & River View are both conversion developments, and are more affordable, quite frankly because they aren't in as great shape as the pictures indicate. At the same time, most locals don't consider them "downtown" either. I'll explain. All of the recent development and nightlife that people want to be near is downtown between North and 3rd Street, for the most part. So, while they are affordable, they are not as desirable as they would be if they were 8 blocks south. I will take a look at the rental rates there for you if you'd like.

There aren't really a lot of condos downtown, and almost no conversions. Over-supply is not an issue and investors seem to be the only people buying condos.

I think you should consider two other options, as well: LSU Property and single family homes downtown.

LSU influenced property can be profitable because anything close to campus has extremely high occupancy rates. I know of three condos that are available right now that are close enough to campus to rent easily. The developer is wanting to sell them quickly because he has them owner-financed, but they are priced a bit higher.

There are also some SFRs closer to the core of downtown that are still affordable, yet could bring more cash-flow monthly.

One way or another, we'd be glad to be your eyes and ears here to see if we can't identify some opportunities worth considering.

Geaux Big Realty
info@geauxbigrealty.com
Web Reference: http://geauxbigrealty.com
0 votes Thank Flag Link Fri Jul 23, 2010
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