Affectionately known as the Pelican State, Louisiana has a lot to offer aspiring real estate investors. One of the primary characteristics of the Louisiana housing market is affordability. With a median home value that is approximately $78,000 less than the national median home value, Louisiana is receptive to first time flippers that might not have the financial means to explore more expensive states.
Now let’s dive deeper into how to flip houses in Louisiana.
Louisiana House Flipping Stats
Median Purchase Price
Median Resale Price
Price Per Square Foot
Population Size In Louisiana
Median Household Income
High School Graduation Rate
Average Travel Time To Work
Best Cities for Flipping Houses In Louisiana
- New Orleans
- Baton Rouge
Safest Areas in Louisiana
- Mandeville – Safety Score: 81.46
- Minden – Safety Score: 79.43
- Gretna – Safety Score: 75.43
- Zachary – Safety Score: 73.47
- Ruston – Safety Score: 72.42
Please note – All the statistics in this article are based on 2019 data. You can view the data sources at the bottom of the article.
The Basics Of Flipping Houses In Louisiana
- Find a property in Louisiana that is undervalued
- Source funding from a reputable lender
- Buy the property for a price that makes it possible to generate profit when it is resold
- Complete renovations that will increase the after repair value
- Find buyers for the property and sell it for a healthy profit margin
2. Leverage The Power of Wholesalers
Finding a good wholesaler can be very rewarding for a property flipper. Wholesalers tend to have access to all the most relevant property databases, and they often have unique personal networks. By using a wholesaler, you effectively gain inside access to their knowledge of properties in Louisiana.
3. Attend Bank Auctions
Bank auctions often present opportunities to purchase properties below their market value. This is mainly because banks hold these auctions in order to sell the properties as fast as possible. If you attend bank auctions with a clearly defined strategy, you can potentially walk away with a new property that fits in perfectly with your investment portfolio.
4. Use Direct Mail To Find Off-Market Properties
Although it is considered an old school technique, direct mail can still yield positive results for house flippers. Direct mail has been shown to have a higher response rate than email, and numerous studies have shown that people actually enjoy checking their mailboxes. More importantly, you might be surprised by how many people have considered selling their homes. Your letter could be the trigger that they have been waiting for.
5. Sign Up To The Multiple Listing Service (MLS)
Even though MLS listings can be competitive, it is still a good avenue for finding properties to flip. The MLS is literally a database created by real estate agents, and it is filled with property details and statistics that can help aid your research process. There is a fee involved, but one deal is all you need to comfortably cover the costs.
6. Find Foreclosures
When properties fall into foreclosure, the primary goal of the loan originator is to recoup any potential losses. This is good news for house flippers, because properties in foreclosure often sell for less than their market value. If you are able to locate foreclosure opportunities in Louisiana, there’s a good chance you will be able to purchase a property for less than its market value. This is why foreclosure can serve as a great platform for a potential flip.
Louisiana Housing Market Analysis
House Flippers In Louisiana Are Selecting Middle Income Houses: The median resale value of house flips in Louisiana is $163,000. This is relatively close to the median home value, which is 170,388. The takeaway here is that property investors are focusing on run down homes in good areas where they sell the property quickly after the renovations have been completed.
Experienced flippers know how to transform the after repair value of a home by focusing on renovations that are known to increase resale value. In addition, house flippers are clearly choosing the right areas, knowing full well that the desirability of a suburb has a fundamental influence on the final sale price.
Home Values Are Predicted To Drop By 1.5%: According to Zillow, home values in Louisiana appreciated by 2,4% over the last 12 months. However, Zillow also predicts that house prices will drop by about 2.1% over the next year. This is more than likely due to the negative impact of coronavirus on the US economy and the real estate market in general.
Although the Louisiana housing market is set to drop slightly, this isn’t necessarily bad news for house flippers. It means that investors can purchase homes at a discounted rate for the next 12-18 months.
Homes In Louisiana Are Reasonably Affordable: The median home value in Louisiana is approximately $170,388, whereas the median home value in the United States is $248,779. That’s about $78,000 less than the national median. This is good news for first time home buyers and first time flippers. It reduces the risk involved when flipping houses, and it reduces the capital needed for new homeowners to take their first step on the property ladder.
Higher Than Average Revenue Per Flip: Where the average revenue per flip throughout the US is just north of $60,000, the average revenue per flip in Louisiana is approximately $70,663. This is excellent news for house flippers. It means that you can potentially spend extra budget on top class renovations, knowing that you should comfortably recoup your losses when the home is resold.
For more details on how to figure out the right price to pay for a property in Louisiana, have a look at our detailed article on using the 70% rule.
If you’re committed to flipping houses in Louisiana, the next step is to invest time and energy into finding the best possible property. We have outlined a number of methods in this post, and all of them can potentially bear fruit.
Once you have identified a property, using a reputable Hard Money lender like New Silver can help accelerate the house flipping process. Our company is built on speed, efficiency and user-friendly technology. The online application can be completed in less than 10 minutes, and we offer instant proof of funds letters to all of our clients.