Obligatory Introduction

There are several things that one is supposed to look for when planning on flipping a house and making a profit, and while they all make sense, they don't make sense when you are buying properties damaged by a category 5 hurricane. For instance, I have a book on the subject that lists warning signs to walk away from such as "peeling shingles, water spots, and evidence of water on the bathroom and kitchen floors". Now if we were buying a house in Pennsylvania, I would heed the wisdom of the author as we don't want a shoddy roof or leaky appliances to deal with. Unfortunately though, most of the houses with the greatest profit potential in New Orleans saw at least two feet of water and 100+ MPH winds making most buy, fix, 'n sell rules obsolete.

Another tricky thing about buying flippable properties in New Orleans is the fact that it is (or was) what is known as a "checkerboard city", meaning that while still imagining yourself driving one of the fifteen ferraris that you just saw parked in front of the many 19th century mansions uptown, you can get stabbed with a rusty screwdriver and have your nikes stolen even though you're only a block away. I have many a theory as to how this close-quartered disparity contributes to the racial divide and sky high murder rate by breeding hate and malcontent between the classes and still somehow begets ignorance, but that's a story for another day. The point is, that for the most part there is no way to tell which neighborhoods will come back and how they will come back. Just as easily as we could buy a house in an area that is rejuvenated and repopulated quickly, we could buy one in an area that the government may subsidize or demand be razed (or raised). This makes the whole process a bit more risky, but like they say, the greater the risk, the greater the potential reward.

I currently have my real estate agent sending me emails of "fixer upper" houses in the uptown and lakeview areas. My target acquisition cost is $100,000 per house, but there is plenty available for well below that, and we are leaning towards starting out with something inexpensive to get our feet wet and then branching out from there. At this point, many houses are going for land value only, meaning that the house is a total write off. That doesn't always mean that they can't be salvaged, usually just that the insurance claim paid off the mortgage and now the owner wants to make a few bucks and get out of dodge. These are one of our targets in addition to bank repos. See, a lot of people who lost everything just gave up and left town. After a period of no contact and no payments, the banks repo the houses and either put them on the auction block, or in many cases, sell it for what is owed. Foreclosures can be an excellent way to get average to fair condition houses for dirt cheap...in any market.

Anyway, I started this blog at the behest of my friend Bil to track the process and progress of our house flipping (ad)venture. It will chronicle the entire journey from hunting, to closing, to renovating, and finally (hopefully), to selling or renting. I have lived in New Orleans for the last six or seven years and am looking forward to playing a part in the rebuilding process by both improving it in some small way, and by home growing a local business.