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:
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.
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:
*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!
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:
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.
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:
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
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.
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:
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:
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!
Today's real estate investors have several options for finding houses to flip in Louisiana. However, the most dependable strategies are:
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.
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
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.
The best cities to flip houses in Louisiana include, but are not limited to:
Learning how to flip homes in Louisiana can become a lucrative venture, but it requires a mind for due diligence, careful planning, in-depth research, and precision execution. These are non-negotiables for any newcomer eager to start flipping houses in the vibrant Louisiana real estate market.
Understanding the process, the potential pitfalls and the tricks of the trade is paramount before embarking on your first property flip. That's where the team at Real Estate Skills comes in. As seasoned professionals in the house-flipping industry, we're well-equipped to guide you on this exciting journey.
At Real Estate Skills, we provide a wealth of resources, advice, and insider knowledge, all designed to equip you with the necessary tools and understanding to succeed in the Louisiana house-flipping market. We're dedicated to ensuring you're fully prepared to take that first leap into house flipping, armed with the proper knowledge and support.
Whether you're a seasoned investor or a beginner, trust Real Estate Skills to guide you in your Louisiana house-flipping endeavors. Tap into our expertise and let us help you transform your house-flipping dreams into successful, profitable realities. Start learning with us today at Real Estate Skills.
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