Thinking of buying a house in NO East and flipping it (1 Viewer)

[barto]

First of all, let me say that i've never done this before, but have heard you can make some quick easy money doing it. There is a house in NO East right off of Bullard that is for sale for only $22,500. The house had only 2 feet of water and has already been gutted out. Houses are being sold in the area from anywhere from $130k to $150k for a 1500 sq foot house.

Anyone know how much it would cost to repair the house? Obviously the house would need a lot of work, but i have no clue what to expect and i'm trying to get all my ducks in a row before i take on this project.

Thanks in advance to anyone who takes the time to respond.

 

[JimEverett]

no such thing as easy money

 

[Colin311]

Who would buy a house in N.O. East right now? It's going to take a very long time to get that part of the city up and running again. I wish you the best of luck but I think it's going ot be hard to sell the house.

 

[UptownShark]

I've had quotes on my house in Gentilly (also approx 1500 sqft) that avg around $100k. Talk to a Realtor about market trends in the area (days on market, avg listing price vs avg sales price, paid-by-seller inducements, etc.) and definitely get at least 3 estimates from licensed contractors. Anticipate work delays, subcontractor issues, cost overruns, etc. And remember that if your general contractor fails to pay any of the subs, the subs can put a lien on your house. So it's imperative that you use someone who is above reproach. The bottome line here, do your homework! One last piece of information...the market value of any property is decided by the buyer not the seller. You can ask whatever you want for a property, but it means nothing unless a buyer is willing to pay it.

Good luck.

 

[Peet]

no such thing as easy money

many women would disagree

 

[efil4stnias]

First of all, let me say that i've never done this before, but have heard you can make some quick easy money doing it. There is a house in NO East right off of Bullard that is for sale for only $22,500. The house had only 2 feet of water and has already been gutted out. Houses are being sold in the area from anywhere from $130k to $150k for a 1500 sq foot house.

Anyone know how much it would cost to repair the house? Obviously the house would need a lot of work, but i have no clue what to expect and i'm trying to get all my ducks in a row before i take on this project.

Thanks in advance to anyone who takes the time to respond.

ok not to burst your bubble here, but let me put some perspective on this. I deal in commercial insurance, so I know a bit since PLENTY of our clients thought about this at some point.
First you must have the $$ to buy. If you pay cash great, if not you take out a loan. If the latter, you must have insurance. That will run you about $1000 annual, but that is for a BASIC BUILDERS RISK that only covers the structure, no liability. ( you cant get liability on an under-construction structure ) Second, the building must NOT REQUIRE any type of structural work ( ie roof rafters, load bearing walls, floor joyces, raising, shoring or underpinning etc ) If so, NO INSURANCE. If you do not use a LICENSED AND INSURED CONTRACTOR...no insurance.

Now, if you are getting a loan, you are also going to need flood insurance. depending on the area and zone ( prolly "A" zone ) it will be about $1400 annual.

Thats the easy part.

The contractors to actually perform the work is where it gets tough. Coupled with the inspection/ inspectors from Orleans parish and you are looking several months to a year until completion.

If you have the means to do so ( income ) then by all means, it certainly helps in the recovery. Just make sure all your ducks are in a row.

 

[buzd]

Don't forget about insurance. You will need to get a builder's risk policy for the time you are repairing it, and then maintain homeowner's on it after that (while you're selling it). If you are not the primary resident, that could be very difficult to get, not to mention requirements for flood insurance, etc. Obviously, you can get around this if you're paying cash for the house, but your opening yourself to a lot of risk.

 

[taygolf]

If the house is completely gutted you will have to put a good bit in it to get it up and going.

Redoing sheet rock and paint and new appliances and light fixtures is one thing but if you have to put in all new plumbing, AC, and electrical then you are looking at a good bit of money. If it looks the way I think it looks which would be a slab with outside walls and 2x4 walls inside and that is it then a rough guess would be between 75k and 100k depending on what you do to it and how much work you do yourself. Also you should know you will not be allowed by city code to do the plumbing or electrical yourself unless you are licensed to do so.

Flips are hard work. You have to stay on top of your contractors and make sure they do not screw you then you have to have the money to buy the property as well as pay the note on the property while you are waiting for it to sale.

 

[Colin311]

I've had quotes on my house in Gentilly (also approx 1500 sqft) that avg around $100k. Talk to a Realtor about market trends in the area (days on market, avg listing price vs avg sales price, paid-by-seller inducements, etc.) and definitely get at least 3 estimates from licensed contractors. Anticipate work delays, subcontractor issues, cost overruns, etc. And remember that if your general contractor fails to pay any of the subs, the subs can put a lien on your house. So it's imperative that you use someone who is above reproach. The bottome line here, do your homework! One last piece of information...the market value of any property is decided by the buyer not the seller. You can ask whatever you want for a property, but it means nothing unless a buyer is willing to pay it.

Good luck.

Sounds like a huge headache.

 

[XJRunner]

Of course it all depends on the size of the house, specifically how many baths and size of the kitchen. That is where your money will be spent... And doing the work yourself will save a fortune.

My business partner and I are almost finished a house off St. Charles; 1600 sqft, 3 bed, 2 bath. Only had a couple inches of water... Two of us did all the work, not one penny spent on labor, and that includes a complete overhaul of all electrical and plumbing. Spent close to 40k.

If we'd pay someone to do the same work, triple that amount, and expect half the quality.

 

[TPS]

>>Who would buy a house in N.O. East right now? It's going to take a very long time to get that part of the city up and running again. I wish you the best of luck but I think it's going ot be hard to sell the house.

Actually, the best real estate agent in this city (Liz Ashe who co-owns Demand Realty) sold both my dad's house in Kennilworth and my aunt's house in Castle Manor within 50 days of putting them on the market. My dad's house went for $45k (4 BR, gutted fully) and my aunt's 1,100sf dump for $25k. If you know how to do the work yourself, you can make money. Both properties btw were bought by owner-occupants. So there is a market for people who want affordable housing. But again, in both instances, the owners knew how to hang and float sheetrock, basic plumbing and flooring. Whether money can be made flipping houses is a subject of some disagreement. But those who can do the work themselves, probably make out the best.

TPS

 

[Wisdom Tooth]

My friend did that with a house in Lakeview. He plans to sell it in five years for a big profit.

 

[JimEverett]

My friend did that with a house in Lakeview. He plans to sell it in five years for a big profit.

that wouldn;t be flipping it.

 

[efil4stnias]

My friend did that with a house in Lakeview. He plans to sell it in five years for a big profit.

musta signed on w/ the LRA if he is waiting five years.

 

[BigRonJon]

I have two I am currently working on in Meraux in Lexington Place. The first is about 95% done. I have learned alot already and feel the second one will be much more profitable. Having good subs is the most important part. Also knowing what is a reasonable price for specific things will keep you from getting ripped off. Its important to buy in an area that is just about to come back. If you buy too early in a mostly undeveloped area, you will get the house for less, but it will take longer to sell because you may be the first house on the block that is finished. If you wait too long in a certain area, most houses will be finished already and sell quicker, but you will have to pay more for the gutted house.

As far as contractors go, make sure you see some of their other work first to determine the quality. Never pay for anything in advance without the work being done first. Get everything in writing, protect yourself with detailed contracts, and plenty of insurance.

It takes a lot of patience and hard work, but if you have good people working for you and you find the right area/house, it can be extremely profitable. Some days are very aggrivating and frustrating, some are rewarding and fun. Ride out the ups and downs. I actually enjoy doing this very much. I dont plan to quit any time soon, there are many houses left to fix. I also feel like I am helping the city in a way.