Hong Lem
Investor from New Orleans, Louisiana
posted over 4 years ago
I am considering buying land and building new homes in New Orleans. Does anyone have builders/contractors they recommend?
Thanks in advance
Account Closed
replied over 4 years ago
I have three words about building in New Orleans - Hurricane Katrina
Braden Smith
Flipper/Rehabber from New Orleans, LA
replied over 4 years ago
Hi @Hong Lem . I'm a local investor and realtor in New Orleans. I work with a number of different contractors, builders and developers. What are you looking to do and where are you looking to do it?
The challenge in New Orleans when it comes to building spec houses, if that is what you are looking to do, is acquiring the land at a price where the numbers make sense. Land is at a premium here in the New Orleans area. There is little supply and high demand.
Hong Lem
Investor from New Orleans, Louisiana
replied over 4 years ago
@Braden Smith Thanks for responding. I am looking for contractors to rehab/build new homes in the marigny, bywater, and gentilly areas. I am also looking to to do new construction in Chalmette.
Braden Smith
Flipper/Rehabber from New Orleans, LA
replied over 4 years ago
@Hong Lem send me a PM with your contact info and I will get you in touch with some builders that may be able to help.
Mike Wood
Developer from New Orleans, LA
replied over 4 years ago
@Hong Lem I would second what @Braden Smith stated. Land is really tough to find, especially at prices that support new construction. I would also caution you about Gentilly, as there are lots of non-profits building houses for sale in that area and it would be very hard to compete with them on a spec house.
Hong Lem
Investor from New Orleans, Louisiana
replied over 4 years ago
@Mike Wood Thanks for the advice. I am currently looking for deals on land to build on.
Mike Wood
Developer from New Orleans, LA
replied over 4 years ago
@Hong Lem Most of the new construction is in areas where the land is very expensive. A good amount of New Orleans where land is available and cheap, will not support new construction costs and profit. Area's like Lakeview, Midcity and Uptown do, but land it very expensive.
Braden Smith
Flipper/Rehabber from New Orleans, LA
replied over 4 years ago
@Mike Wood hit the nail on the head and I agree with him. The builders we work with are having just that issue... finding land they can acquire where the numbers will work for new construction. The ones that were building in Lakeview have pulled out because lots have gotten too expensive. The only ones still building are the ones that were sitting on some invesntory of lots.
And he is right about Gentilly. Too many cheap houses have been built in most areas to where you can't compete on price, unless you are in the top of the Oak Park area. But lots have gotten expensive there too. They have doubled in price in the last couple of years.
Hong Lem
Investor from New Orleans, Louisiana
replied over 4 years ago
Thanks @Mike Wood and @Braden Smith for the input. I have been looking in the oak park area and there are some lots available. I'm sure there won't be much around next year though.
Braden, I PM'ed you my email.
Hong Lem
Investor from New Orleans, Louisiana
replied over 4 years ago
What areas would you recommend @Mike Wood
Johnquel Jones
Wholesaler from New Orleans, LA
replied over 4 years ago
Land in Chalmette is going for 5-10k....Must be why I see a lot of new construction here. Or, am I wrong?
Matt M.
Investor from Indianapolis In
replied over 4 years ago
@Hong Lem I would advise against Oak Park unless you already hold land their. The land inventory there is either builder owned, or pretty deeply flawed title wise. Not sure where actual land sales are trending, but MLS list prices there and building your first spec home would be a bad idea, not nearly enough margin.
Kicking myself presently over Oak Park, had multiple leads there and offers in the low 30's and 40's. Should have closed them in retrospect.
Hong Lem
Investor from New Orleans, Louisiana
replied over 4 years ago
@Johnquel Jones I've looked in chalmette and most lots are >20K now.
Apparently St. Bernard sold a ton of lots in packages to builders native to Chalmette in the past couple of years. If you have lots under 10K then I'll gladly take them off your hands haha.
@Matt M. I feel you. I wish I would have jumped in that area a couple years ago.
Johnquel Jones
Wholesaler from New Orleans, LA
replied over 4 years ago
Yeah, you are definitely right @Hong Lem . Most of the properties I saw are now gone. If I run into any land out there that is reasonable, I will let you know. Any preference? Price limit?
Mike Wood
Developer from New Orleans, LA
replied over 4 years ago
@Hong Lem I would really caution you about buyer super cheap land. My experience with NOLA is the super cheap land areas can not support new construction pricing and deliver a profit. Unfortunately, my opinion is that you need to spend alot of money (over $100k) on a lot to make a decent profit on a spec house.
Right now, there area parts of Midcity that has some empty lots that are sub $100k and can support new construction. If you can find something in Lakeview (hard not to find anything under $150k for a lot) that would be my first choice if I were building a spec house.
The Oak Park area is seeing alot of new construction, but land prices have skyrocketed over the last few years, pushing over $100k now.
It really depends on your total budget. If you cant swing a $350k or more build, your options are limited.
In my opinion, anything less than $40k for a lot is a super bad idea. There is a reason that they are so cheap. Sure, every once and a while you can find a super bargain, but its rare. Before you buy, do lots of research on the area, what houses are selling for, and make sure you have your numbers nailed down. Unless your building 2,000ft2 or larger houses, I dont see how your going to get your build costs much lower than $90-100/ft2.
Hong Lem
Investor from New Orleans, Louisiana
replied over 4 years ago
@Johnquel Jones I am open to anything you can find lol
@Mike Wood I am not sure I agree with you. I also do some wholesaling and have come across many lots under 100k in oak park. 40k-50k seems like the average price on the MLS unless I am thinking of a different area (Warrington - E fields and Filmore-Robert E Lee).
Do you have contractor recommendations that build for 90/ft2? If so, can you PM me their info?
Matt M.
Investor from Indianapolis In
replied over 4 years ago
@Hong Lem Oak Park is defined by a relatively small area, Filmore to Robert E Lee, Pratt to St Bernard. I think the area the Neighborhood Association define it as is even smaller.
Warrington to E Fields is a nice area too, but @Mike Wood hit the nail on the head earlier. Lots of Non-Profit builds in the area which helps appraisals of new construction but the footprint is much smaller than 2000sf usually. Below 2000sf your cost PSF will be much higher.
Johnquel Jones
Wholesaler from New Orleans, LA
replied over 4 years ago
Originally posted by @Mike Wood :@Hong Lem I would really caution you about buyer super cheap land. My experience with NOLA is the super cheap land areas can not support new construction pricing and deliver a profit. Unfortunately, my opinion is that you need to spend alot of money (over $100k) on a lot to make a decent profit on a spec house.
Right now, there area parts of Midcity that has some empty lots that are sub $100k and can support new construction. If you can find something in Lakeview (hard not to find anything under $150k for a lot) that would be my first choice if I were building a spec house.
The Oak Park area is seeing alot of new construction, but land prices have skyrocketed over the last few years, pushing over $100k now.
It really depends on your total budget. If you cant swing a $350k or more build, your options are limited.
In my opinion, anything less than $40k for a lot is a super bad idea. There is a reason that they are so cheap. Sure, every once and a while you can find a super bargain, but its rare. Before you buy, do lots of research on the area, what houses are selling for, and make sure you have your numbers nailed down. Unless your building 2,000ft2 or larger houses, I dont see how your going to get your build costs much lower than $90-100/ft2.
In the case of Chalmette, the land is cheap because people did not move back here after Hurricane Katrina. It just recently,within the past 2 years, became available because the government basically said, "screw it, these people aren't moving back and we could use more homes here." 5-10k land grabs were in good neighborhoods commanding high selling prices. However, as everyone knows, there are tons of factors that play into how quickly that property will sell and anything else that follows.
Mike Wood
Developer from New Orleans, LA
replied over 4 years ago
@Hong Lem The area that I was talking about is west of London Ave, near Holy Cross school. The area you are talking about (Warrington to Elysian Fields) is a much different area. I have a duplex in that area, and it does not really support new construction. Sure there are some houses being build by owner occupants, but not really developers. @Matt M. has it right.
Hong Lem
Investor from New Orleans, Louisiana
replied over 4 years ago
@Mike Wood I am not so sure about that. There are a few houses being built by developers in that area.
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Source: https://www.biggerpockets.com/forums/44/topics/431653-building-a-new-home-in-new-orleans
