George Becnel hasn’t found as many properties to flip as he‘d like in St. Charles Parish, but he’s keeping his eyes peeled for the next opportunity because this area offers something he values greatly – a stable market.
With the right number crunching they work and sell well, Becnel said.
“It’s all numbers,” said the Destrehan contractor. “You have to know what it’s going to cost you. You have to know what number of dollars to bring it back. You have to make sure that you know what type neighborhood you’re building in. You need to always do great work so you can always get the top dollar.”
Becnel successfully flipped two properties in the parish and, even more importantly, he didn’t encounter the typical hidden structural problems with those houses. He prefers to find properties in Destrehan and Norco, which serve as comfort zones for him since he grew up in the area.
“They did well,” he said of his flips. “I’ve renovated houses for folks who have done well and have not done well.”One of those houses involved him renovating a room for a flipper. Becnel found termites in the room and a deeper inspection found them in half the house that cost $80,000 or what he called “a flipper’s nightmare.”
This didn’t deter Becnel from continuing to find properties because of his low-risk approach to flipping.
“My dad always told me you don’t go to work in short pants,” he said of staying vigilant about not risking what he can’t afford to lose. “I have to be really, really picky because of you stumble you lose the profit off your last three houses.”
But there’s the other side of speculating on houses in the parish’s highly competitive market.
Becnel was still chastising himself for offering $36,000 on a $40,000 house with 1,300 square feet in New Sarpy. He was still wincing over the lost deal, particularly when the renovated house sold for $142,000.
“It was a lesson learned,” he said of losing the property to someone who offered full price just a few days ago. “In St. Charles Parish, there is no buying property for pennies.”Wendy Benedetto, agent with Latter & Blum in Destrehan, agreed the parish’s healthy housing market has foreclosures or bank-owned properties, but they aren’t cheap even when they have problems.
A 1,700-square-foot house infested with termites listed for $177,900 or $104 per square foot. This isn’t a flipper property, she said, although it might make a good buy for a first-time home buyer.
Another 1,800-square-foot property that was gutted with some flooring originally listed for $184,900 and is now down to $122,900. Benedetto offered $110,000 for it on behalf of an investor and the owner turned it down, but at its current price doesn’t work for an investor who wants to make a profit.
“These are not fantastic deals you make a ton of money on,” she said. “These are really deals for first-time buyers who can bring in someone to do the work.”
Bank repos or bank-owned properties do come on the market in St. Charles Parish, but there are few of them.
Benedetto said her research shows there were 65 bank-owned properties on the parish market in the last 365 days (both east and west banks).
Of this total, 14 sold ranging in price from $33,000 to $295,000. Another two on the list are pending sales; three new listings ranging in price from $169,900 to $316,500; two back on the market ($72,900 and $$185,000) and four with price decreases that still ranged from $104,500 to $204,000.For these properties, Benedetto said the average days on market is 49 days although more challenging properties can be on market for as many as 200 days.
“For an investor, these house prices are higher and you’d have to be on top of it to make that good deal,” she said of flippers who want to make fast and fat profit. “You’re just not going to make a lot of money.”
Some investors are buying properties for rentals, which she said does offer a good market.
“Our rental properties are really good,” Benedetto said. “There’s a demand for rentals – always.”
Brandt Dufrene, president of First National Bank in Boutte agreed the area’s full employment, excellent school system and progress with levee construction are all contributing the area’s economic health, but are also making flipping property a challenging proposition in the parish.
There are some people flipping property, but Dufrene said they’re qualified investors with the ability to financially withstand not renting or not selling flip properties.
“They are a thing in the past,” he said. “Bank lending is limited. Credit criteria has gotten tighter from past years. There were very few lenders doing this that created the collapse [housing bubble] for everybody.”
It’s like Becnel said it takes to make this kind of deal: “Numbers. Numbers. Numbers.”