How To Flip Houses In Louisiana: Step By Step (2023)

The unique convergence of a diverse economy, rich culture, and a relatively low median home value suggests the Louisiana real estate market is an excellent place for aspiring real estate investors to start a career in the housing sector. In fact, there may be no better time to learn how to flip houses in Louisiana than today.

With 10.4% of the state’s mortgages “seriously underwater,” according to ATTOM Data Solutions’ latest U.S. Home Equity & Underwater Report, Louisiana has the highest share of mortgages with at least 25% more than the property’s actual market value. As a result, local investors who learn how to flip houses in Louisiana may be able to capitalize on plenty of investment opportunities in a state with pent-up demand.

Louisiana looks like a great place to invest in real estate for the first time. However, flipping houses in Louisiana will require hard work, a mind for due diligence, and a lot of research. That’s why we have created this step-by-step guide to tell you everything you need to know about flipping houses in Louisiana, including:         

• What Is Flipping Houses?
• Louisiana House Flipping Statistics
• How To Flip Houses In Louisiana (7 Steps)
• How To Find Houses To Flip In Louisiana
• Do You Need A License To Flip Houses In Louisiana?
• How To Flip A House In Louisiana With No Money
• Best Cities To Flip Houses In Louisiana
• Final Thoughts On Flipping Homes In Louisiana

What Is Flipping Houses?

House flipping is one of today’s most popular real estate investing strategies. As its name suggests, flipping houses involves buying real property to resell it for a profit. Quite figuratively, for that matter, investors are “flipping” the property from the previous owner to a new one.

It is worth noting, however, that house flipping is more involved than simply buying and selling property. Instead, home flipping is more like an exact science that typically involves finding an undervalued property, making necessary repairs and improvements, and reselling it for a higher price.

Every step along the way is meticulously calculated to increase profit margins. From interest rates to the cost of labor and materials, house flippers seek to maximize profits when the time comes to sell the finished product. 

Louisiana House Flipping Statistics

Today’s best house-flippers are only as good as the information they have to work with. If for nothing else, a lucrative house flip depends entirely on the deal’s respective numbers. As a result, aspiring investors need to familiarize themselves with the most reliable Louisiana house-flipping statistics, not the least of which include:

• Average Home Value: $182,959
• 1-Year Appreciation Rate: +1.4%
• Median Days To Pending Sale: 26
• Median Listing Price: $209,500
• Homes For Sale: 5,114
• Months Of Supply: 5
• Foreclosure Rate: One in every 4,350 homes
• Population: 4,590,241
• Median Household Income: $53,571
• Unemployment Rate: 6%

*All Louisiana housing market statistics are as of the second quarter of 2023.

Ready to start flipping houses in Louisiana? Join Alex Martinez at his FREE training to learn how to get started with house flipping and wholesaling!

How To Flip Houses In Louisiana (7 Steps)

Learning how to flip houses in Louisiana may seem intimidating to new investors. However, the process becomes instantly more approachable and easier to digest when you follow our 7-step guide:

1. Find A House-Flipping Mentor
2. Research The Local Housing Market
3. Find & Analyze Distressed Properties
4. Raise Capital To Fund The Deal
5. Close On The House
6. Renovate The Property
7. Resell The House

1. Find A House-Flipping Mentor

There isn’t a single new investor who wouldn't benefit from recognizing the value of working with a seasoned veteran. Collaborating with real estate professionals in the house-flipping industry—someone who has already realized an inherent level of success—can provide invaluable insight and unwavering support within an industry where knowledge and confidence reign supreme.

With the guidance of an experienced mentor, investors may navigate every stage of the house-flipping process. Mentors can offer comprehensive assistance, from securing funding for a deal to overseeing renovations and selling for profit. However, it is not solely their instructions on what to do that hold significance; their advice on what not to do is equally valuable. By learning from their past mistakes and effectively mitigating risk, you can spare yourself potential pitfalls, making finding a mentor worthwhile. 

2. Research The Local Housing Market

For investors learning how to flip houses in Louisiana, it is essential to thoroughly understand the available resources to make informed decisions. With several options available, however, it can be overwhelming to determine which resources will be the most valuable.

Instead of trusting your flipping career to just any source, reference the following platforms for the most accurate information in today’s marketplace:

• Louisiana Realtors Association
• Zillow Housing Data Research
• Redfin’s Louisiana Housing Market Overview
• Realtor.com’s Louisiana Market Overview
• ATTOM DataSolutions’ Louisiana Real Estate & Property Data

3. Find & Analyze Distressed Properties

Once investors find a property they are interested in or one that looks like a good candidate to flip, it's time to analyze the numbers and determine whether or not they represent a potential deal. While there are countless numbers to evaluate, new investors may want to focus on a single variable: the after-repair value (ARV). Otherwise referred to simply as the ARV, the after-repair value is the home's estimated worth once all necessary repairs have been completed. To do this, you can compare it to similar properties, also known as "comps."

Once you know how much the home is worth after all the repairs, it’s time to figure out how much you will spend on the deal. Perhaps even more specifically, it’s time to determine how much you can spend on the home and still make a profit.

Otherwise known as the maximum allowable offer (MAO), the MAO is the highest amount you should pay to make a reasonable profit. For example, new investors can use the 70% rule to find the MAO, which states that you should aim to buy the property for 70% of its ARV minus rehab costs and holding costs.

Read Also: Estimating Rehab Costs: (Ultimate) Investor's Guide

4. Raise Capital To Fund The Deal

While it is possible to fund the deal yourself (at least for those with the luxury of doing so), raising capital is typically a better idea. If for nothing else, using other people’s money means you can remain more liquid when it’s crucial to have immediate access to cash. Moreover, tapping into other investors’ cash reserves can facilitate several deals at a time, allowing a full-fledged flipping business to scale accordingly.

Most investors agree they should raise capital to fund a deal, which begs the question: Where can new investors turn for money to flip a home? The majority of investors turn to two sources: private and hard money lenders. Private and hard money lenders will come with a higher cost than traditional loans, but their benefits greatly outweigh the 10% to 15% investors expect to pay in interest.

In return for the higher rate, investors will receive the funds immediately without jumping through the bureaucratic hoops associated with institutional loans.

5. Close On The House

Closing on real estate in Louisiana isn’t all that different from any other state. That said, it is worth noting that Louisiana is known as an “attorney state.” As an attorney state, a qualified attorney must accompany real estate transactions. The attorney’s job is to oversee the process and make sure the following steps are done correctly and in accordance with the law:

• Negotiations: All real estate transactions start with negotiations, but once each side agrees to terms, they are put in writing and formalized in a purchase agreement. As its name suggests, a purchase agreement outlines the terms and conditions of the impending transaction—all of which must be met before the deal can close.
• Title Search: The attorney is required by Louisiana law to examine and certify the property's title; that way, there can be no ownership disputes in the future.
• Inspection: The buyer, or the investor in this case, can have the subject property inspected to identify any potential issues that may need to be addressed before closing.
• Final Walkthrough: The final walkthrough takes place right before the closing. The buyer will confirm that the property is in the same condition the purchase agreement states.
• Closing: The buyer, seller, and their respective attorneys will meet to sign the necessary documents and transfer ownership of the property. The buyer will also pay the purchase price and any costs agreed upon in the original contract, including prepaid taxes or insurance (most investors pay the total without a down payment).
• Recording: Once the transaction is complete, the transfer of ownership is recorded by the appropriate government authority, typically the local Recorder’s Office.

6. Renovate The Property

Without wasting any time, the investor needs to start renovating the property. The sooner the rehab is completed, the less the investor can expect to pay in extra expenses and holding costs. That said, don’t let the speed of the rehab jeopardize the deal.

Investors must act fast, but they also need to make the proper renovations and fixes. The goal is to bring the property up to the neighborhood standard without exceeding the budget. As a result, it’s best to aim for projects that maximize return on investment (ROI).      

According to Remodeling Magazine, the renovations that return the most money to investors in Louisiana are:

• Electric HVAC Conversion: 1% ROI
• Manufactured Stone Veneer: 2% ROI
• Vinyl Siding Replacement: 3% ROI
• Fiber-Cement Siding Replacement: 6% ROI
• Garage Door Replacement: 8% ROI

7. Resell The House

Real estate investors should act fast to sell their investment property to avoid incurring property taxes, utility bills, and general holding costs. Delaying the sale also increases the opportunity cost. Each day the home sits unsold is another missed opportunity for a subsequent deal.

Working with a real estate agent can help expedite the sales process and ensure a more profitable sale. While their services may cost a percentage of the sales price, their expertise can help set a competitive home price and market the property to potential home buyers, outweighing the costs.

Thinking about investing in real estate? Join Alex Martinez at his FREE training to learn how to get started with house flipping and wholesaling!

How To Find Houses To Flip In Louisiana

Today's real estate investors have several options for finding houses to flip in Louisiana. However, the most dependable strategies are:

• Working with a real estate agent to utilize their network and knowledge of the local market.
• Gaining access to the Multiple Listing Service (MLS) through your own license or an agent’s to search for deals.
• Attending the foreclosure auctions of banking institutions trying to get rid of non-performing loans.
• Visiting the local Recorder’s Office to identify homeowners at risk of foreclosure.
• Initiating a direct mail campaign to target distressed homeowners.
• Identifying neglected properties whose owners may be more inclined to sell.

While the strategies above can provide a solid foundation for finding promising properties to flip in Louisiana, having access to the Multiple Listing Service (MLS) can dramatically expand your options and streamline the search process.

To discover the secrets of gaining access to the MLS without the usual licensing requirements, check out our in-depth video: 

Let real estate expert Alex Martinez will guide you through the process, equipping you with the knowledge you need to navigate the Louisiana real estate market with confidence and efficiency.

Do You Need A License To Flip Houses In Louisiana?

You do not need a real estate license to flip houses in Louisiana. Real estate investors of every level can flip real estate in Louisiana without acquiring a license.

That said, there’s no reason an investor can’t get licensed. Becoming a licensed agent will cost money, but the benefits (like access to the MLS) may be worth the investment.

Read Also: How To Get MLS Access: The (Ultimate) Guide

How To Flip A House In Louisiana With No Money?

Despite what anyone says, real estate transactions require capital to execute. However, investors are under no obligation to use their own money. Instead, most investors seek to get funded by private money lenders and hard money lenders.

Private money loans and hard money loans are non-traditional sources of funding, meaning big banks don’t originate them. Private lenders, for example, are simply anyone with excess capital that’s willing to invest it in return for interest. Private lenders can be anyone, from family members to professional contacts. On the other hand, hard money lenders usually work under professional lending companies specializing in real estate investments; they are more experienced than their private money counterparts but not as corporate as traditional lenders.

Outside of short-term loans, there’s one more way to flip a house in Louisiana with no money: wholesaling real estate. Investors may wholesale properties without ever purchasing them. Instead of buying properties, wholesalers simply obtain the rights to buy said houses; they enter into a contractual agreement that states they are the only ones allowed to buy the house. Once the right to buy the home is theirs, they simply sell their right to an end buyer for a fee.       

Best Cities To Flip Houses In Louisiana

The best cities to flip houses in Louisiana include, but are not limited to:

• Baton Rouge: Homes in Baton Rouge receive an average of 2 offers and sell in around 29 days making it a competitive market for house flipping in Louisiana. The median sale price was up 2.0% since last year averaging $250,000 last month. Moreover, the median sale price per square foot in Baton Rouge is $142, up 5.2% from 2022. This indicates a steady and growing housing market, which is beneficial for house flippers as it suggests a potential for profit when buying properties, renovating them, and selling at a higher price.
• New Orleans: While not as competitive as Baton Rouge, New Orleans still presents ample opportunity for flipping houses in Louisiana. Homes in New Orleans receive 2 offers and sell in around 64 days on average. The median sale price of a home in New Orleans was $342,000 last month, down 6.9% since last year. The median sale price per square foot in New Orleans is $220, down 4.8% since last year. Despite the recent dip in prices, New Orleans still presents attractive opportunities for house flippers due to its unique character and cultural appeal.
• Shreveport: Shreveport presents a favorable environment for house flipping, as evidenced by the steady rise in property values over the past year. The average home value in Shreveport is currently $123,436, reflecting an upward trend of 1.9% over the past year. The steady appreciation in property values creates a favorable environment for house flippers, who can purchase properties, make improvements, and potentially sell them for a profit in a rising market.
• Lafayette: The housing market in Lafayette, Louisiana presents promising opportunities for house flipping. With the average home value currently standing at $205,917, up 3.6% from the previous year, investors have the potential to generate significant profits. As the market is experiencing an upward trend, it could be an advantageous time to consider house flipping in this region. 
• Metairie: Metairie's proximity to New Orleans, coupled with its own unique charm and amenities, could make it an attractive location for potential home buyers, thereby increasing the likelihood of successful house flips. The average home value in Metairie is currently $281,706, which has experienced a slight dip of 1.0% over the past year. While a decline in home values might initially seem concerning, this dip in prices may allow investors to purchase properties at a lower cost, renovate them, and potentially sell them at a profit once the market rebounds. 

Final Thoughts On Flipping Homes In Louisiana