Remodeling a house can sometimes expose unknown issues that may need immediate attention, so NOLA house flippers need a financial cushion to protect themselves.
How to Get Started, and Some Common Mistakes to Avoid
Given the popularity of reality television shows such as Fixer Upper, Flip or Flop, and Property Brothers, more and more people are considering giving up their day jobs and becoming full-time house flippers.
But making a living flipping houses is not as easy as it looks on TV, and there are some requirements that need to be considered in order to make smart investments that maximize your profits:
Be in a good financial position.
New Orleans flippers need to have an excellent credit score and some ready cash, since lenders have tightened the requirements for home mortgages, and if you can come up with the down payment, you won’t have to pay for private mortgage insurance (PMI). You’ll also need to know the NOLA real estate market, since a home will sell more quickly if it is located in a desirable area. Consulting with a professional New Orleans Realtor will ensure you’re making a wise decision about the location of your property.
Don’t try to do it alone.
While some people seem to have a natural ability to flip a house, most will benefit from the help of others who are experienced in the legal, accounting, and renovation aspects of flipping houses. Flippers typically work in a relatively tight time frame, and a team of experts including a Realtor, lawyer, contractor or renovation expert, accountant, inspector, and insurance representative can make the process go much more smoothly.
Educate yourself about the area.
Successful home flippers know a lot about the area in which they are purchasing homes, including the features necessary to sell a home in a particular neighborhood. If the homes in a certain neighborhood are known for historical significance or landscaped yards, those are features a flipper will need to include to sell a property there. Flippers should also be aware of what nearby homes are selling for and whether there is likely to be future development in the area, since this could affect the popularity of a certain neighborhood.
Sharpen your do-it-yourself skills.
The most successful house flippers tend to be those who have a knack for home improvement. These flippers don’t necessarily have to hire someone to perform all the work that needs to be done, and are able to step in and do the work when time or money constraints become an issue. Most flippers have the ability to install a countertop, complete basic plumbing or electrical work, perform demolition, and paint a room, when necessary.
Know renovation costs (and have a cushion available).
Home flippers try to buy properties for a reasonable price and then resell them quickly, although improvements usually need to be made to make the property more appealing to buyers. Because anything spent making structural or cosmetic changes to a home will affect their bottom line, flippers need to have the ability to accurately estimate renovation costs, including labor, materials, and local building permits. Because remodeling a house often exposes unknown issues that may need immediate attention, the most successful flippers build a cushion into their budget for these unforeseen expenses.
Could flipping houses in New Orleans be in your future? To discuss the prospect with real estate agents familiar with the local market and home renovations, contact a Satsuma Realtor.