If you are looking for a comprehensive guide to start flipping houses in the state of Mississippi, you’ve come to the right place.
Flipping houses is one of the simplest ways to get started investing in real estate. It might be a lucrative business enterprise. However, because it is a high-risk investment, you must take into account a number of factors.
But have no fear, I’m here to help you with your studies and decisions. This detailed essay breaks down the market research, evaluation, and technique for flipping properties in Mississippi.
Flipping Houses in Mississippi
Mississippi has one of the hottest housing markets in the country. For house flippers, it’s a once-in-a-lifetime opportunity to make money. Despite the low property market valuation, investors who choose the appropriate properties and flip houses in Mississippi profit handsomely.
Every investment, including real estate, is highly specific to its location, and Mississippi is no exception. Paying attention to current market happenings and knowing how to respond fast will assist you in determining whether you have made a profit or loss. You should always work with a local specialist real estate agent to understand the trends in these local markets and find investment possibilities. Their comprehensive understanding of the ins and outs of these particular property markets can assist you at every turn.
Analyzing the Mississippi Housing Market in 2022
Mississippi has the cheapest housing market in the US. Mississippi’s average house value is $161,162 as of April 2022, which is significantly lower than the national average home value of $344,000. Furthermore, house values in Mississippi climbed by a little more than 5.4 percent in 2021, and are expected to rise by a stunning 15.3% in 2022. These prices, on the other hand, vary even within the state, indicating how regional and localized property markets are.
This property market trend in Mississippi has drawn real estate investors from all around the country. The demand for homes in Mississippi currently outweighs the supply. This has resulted in a strong seller’s market in Mississippi’s housing market. It’s easy to understand why investors are flocking to Mississippi’s real estate market. Two of the key reasons for development are the expanding population and the better employment and education sectors. Mississippi has a high school graduation rate of 88.4% and a median family income of $45,000 per year.
Furthermore, the exceptionally cheap housing costs in Mississippi make the market more accessible to first-time real estate investors. You’ll need less money to get started, which means there will be more newcomers and hence more competition in the future.
How to know if the house in Mississippi is a good investment?
After learning about Mississippi’s broad housing market and economy, you’ll probably want to check into a more specific location and community to identify potential houses. Keep in mind that not every local home market offers the same kind of investing options.
In general, a variety of factors go into assessing whether or not a property is a good investment. While you’re just starting out, avoid local marketplaces with a lot of inventory and postings that have been active for a long time. Houses in Southaven sell after an average of 48 days on the market. If the property in the region is still operational after 48–60 days, it is a no-go.
If the price of a house in Mississippi is less than the local market average, it is also a good investment. Looking for houses that are significantly less costly than past sales in the region is one of the simplest ways to detect potential value. Remember that the less expensive homes will require significantly more changes than the more expensive ones.
How much should I pay for a house in Mississippi?
It’s usually a good idea to stick to the 70% rule when deciding how much to spend on a home in Mississippi. According to this rule, you should never spend more than 70% of the house’s after-repair value, less repair and renovation expenses. Let’s say you buy a house in Mississippi and want to spend $20,000 on repairs and remodeling. Keep in mind that upgrades raise the property’s market value. Let’s say your house is worth $250,000 after repairs.
According to the 70 percent rule, you shouldn’t have spent more than 70% of the after-repair value minus repair expenditures to buy this property. When you add up the numbers, it only amounts to $155,000.
It’s important to remember that the 70 percent rule is optional. It’s merely a guess of the house’s true value. While flipping houses in Mississippi, this rule tries to establish a profit margin that is large enough to cover all other expenses while still leaving you with a healthy profit margin.
Do you need a real estate license to flip houses in Mississippi?
You don’t need a real estate license to flip properties in Mississippi. However, if you want to start flipping houses in Mississippi full-time, getting both a realtor and a contractor license is usually a good idea.
If you don’t want to deal with the challenges of getting a realtor or contractor license in Mississippi, that’s great. In this instance, I strongly advise you to use a seasoned realtor and contractor with whom you can establish a positive working relationship.
Finally, if you are new to Mississippi, finding a trustworthy contractor or repairman may be challenging. Furthermore, zoning restrictions and standards vary by city, and market trends shift often. Working with a trustworthy agent or contractor might help you foresee problems.
How to start flipping houses in Mississippi and make a profit?
You’re ready to begin your home flipping journey in Mississippi once you’ve done comprehensive research on the Mississippi property market and are confident that the house is a solid investment. Follow these six steps to begin flipping houses in Mississippi and benefit handsomely from this type of real estate investing.
1. Create a Budget and Secure Financing
When flipping houses in Mississippi, the first thing to consider is your financial status. Before looking at prospective attributes, it’s usually a good idea to do the math.
If you have cash on hand, you should already know how much money you have. You may avoid financing charges, mortgage payments, and any other closing costs or fees by paying cash for your Mississippi house flips. As a result, if you have cash while flipping houses in Mississippi, you should always use it.
Using a loan or other kinds of financing to acquire and restore a property may dramatically lower your potential returns. If you took out a $150,000 loan to buy a house in Mississippi, you’ll continue making mortgage payments until the home is sold. Even a 10% down payment on a home might cost around $15,000 to purchase. Furthermore, you’ll need to invest an extra $5,000 in addition to the $20,000 for repairs and improvements.
Repairs and enhancements, unfortunately, take time. As a result, you may wind up paying your mortgage for a longer period of time, perhaps losing a large profit margin. Furthermore, when property taxes, building permits, utilities, marketing costs, closing fees, home insurance, realtor commissions, and other costs related to flipping houses in Mississippi are included, you may not be able to profit at all.
As a consequence, having cash may help you save money on all of these things while also allowing you to keep as much of your earnings as possible.
But don’t be concerned if you don’t have any cash. There are still a few alternative ways to support your house-flipping business on a shoestring budget.
2. Research the Cities and Neighborhoods
After you’ve found the homes that are listed below market value and taken into consideration other factors such as active days on the market, you can assess the neighborhood’s attractiveness. When it comes to flipping homes in Mississippi, the quality of the neighborhood is crucial. Other quantitative variables, such as the quality of education, entertainment, parks and recreation, and the neighborhood’s shopping experience, should be examined in addition to the listing and sales price.
Existing housing stock in Mississippi’s older villages, as well as a rapidly growing urban region, might benefit from rehabilitation and repair. Flipping properties may be a lucrative business in Mississippi. You must, however, learn to recognize the appropriate options.
Here is a list of the 4 best cities to flip houses in Mississippi in 2022.
Flipping Houses in Jackson, MS
Jackson is the biggest city in the state of Mississippi. This city is composed of 9 neighborhoods and offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Jackson is just $140,000, trending down 6.7% year-over-year. The median listed home price per square foot is $90.
The city offers 81 public schools rated good or higher by GreatSchools and 33 private and charter schools. Jackson also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.
Out of the 9 neighborhoods in Jackson, Woodland Hills is the most expensive one, with a median home price of $320,000. On the other hand, Fondren is the most affordable neighborhood, with a median listing home price of just around $85,000. There are also some other great neighborhoods, like Belhaven, Cherokee Heights, and Broadmeadow.
Flipping Houses in Biloxi, MS
Biloxi is a small city in Mississippi with just 4 neighborhoods. It offers multiple affordable duplexes, townhouses, and affordable multi-family homes. As of April 2022, the median listing home price in Biloxi is $240,000, trending up 7.7% year-over-year. The median listing home price per square foot is $130.
The city offers 20 public schools rated good or higher by GreatSchools and 5 private and charter schools. Biloxi also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.
Out of the 4 neighborhoods in Biloxi, Woolmarket is the most expensive one, with a median home price of $539,700. Conversely, East Biloxi is the most affordable neighborhood, with a median listing home price of just around $178,000.
Flipping Houses in Tupelo, MS
Tupelo is a city in Mississippi that consists of 14 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Tupelo is $220,000 trending flat year-over-year. The median home listing price per square foot is $113.
On average, houses in Tupelo sell after 50 days on the market. The city offers 27 public schools rated good or higher by GreatSchools and 3 private and charter schools. Tupelo also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.
Of the 14 neighborhoods in Tupelo, Spring Lake is the most expensive, with a median home price of $495,000. On the other hand, Thomas Street is the most affordable neighborhood, with a median listing home price of just around $160,000. There are also some other great neighborhoods like Lee Acres, Audubon, Bel Air, and Historic Downtown Tupelo.
Flipping Houses in Gulfport, MS
Gulfport is the capital city of Mississippi and is composed of 36 neighborhoods and offers multiple affordable duplexes, triplexes, and affordable multi-family homes. As of April 2022, the median listing home price in Gulfport is $215,000, trending up 22.9% year-over-year. The median listed home price per square foot is $125.
The city offers 34 public schools rated good or higher by GreatSchools and 6 private and charter schools. Gulfport also offers hundreds of grocery stores, restaurants, and cafes. There is also a plethora of beautiful parks and gyms for a healthier lifestyle.
Out of the 36 neighborhoods in Gulfport, East Beach is the most expensive one, with a median home price of $613,500. On the other hand, Fairgrounds is the most affordable neighborhood, with a median listing home price of just around $94,000. There are also some other great neighborhoods, like Pine Hills, Broadmoor, and Lyman.
3. Assemble your team
You’ll need a team of individuals to make each flip a success, whether you’re flipping houses full-time or part-time in Mississippi. A real estate lawyer, a lender, a real estate agent, a general contractor, a few laborers, and an accountant will almost probably be required.
Working with a trusted team rather than a new specialist for each task is also great if you want to make house flipping a regular element of your investing plan.
4. Select and Purchase your Mississippi House
It’s finally time to buy your property in Mississippi after you’ve sorted out your finances and determined whether or not it’s a smart investment. Another thing to bear in mind when buying a property is that properties that require more maintenance and upkeep are frequently less expensive to acquire. As a result, reselling them will take longer.
On the other hand, houses in good shape that do not require considerable repairs and renovations are much more expensive. You will save a lot of money in the long run and will not have to worry about house improvements if you spend more money up front.
As a consequence, while looking for a property in Mississippi, try to find a middle ground between these issues. Choose a house that best fits your abilities to flip, money, and timeline.
5. Repair and Renovate the House
Consider how much money will be required for repairs and upgrades, as well as how long they will take. Determine which upgrades will add the most value and whether or not they will appeal to potential buyers. Adding air conditioning and energy-efficient modifications to a home may quickly increase its value for homeowners who want to escape the hot and humid Mississippi summers and chilly Mississippi winters.
Furthermore, power washing the outside of the house, painting the inside, fixing a leaking faucet, reglazing and caulking bathtubs, and cleaning the floors are all small but vital jobs that will help your property sell faster.
6. Resell the Renovated Mississippi House for a Profit
It’s time to re-list the property after you’ve finished fixing and restoring it. You have two options for reselling your home in Mississippi. The first choice is to sell as a for-sale-by-owner (FSBO), while the second is to sell through a real estate agency.
Saving money on commissions is one of the numerous advantages of selling your home without the help of a real estate agent. You must pay a fee to the buyer’s agent even if you sell your Mississippi house on your own (3 percent ). You’ll need to be ready to bargain like a pro and fill out all of the paperwork correctly if you want to sell your property swiftly.
If you don’t want to deal with the hassle of selling the home yourself, you may always hire a professional real estate agent. The process of preparing contracts, discussing them, signing them, and closing them will all be expedited. However, you will be required to pay them a 3% fee for their services.
How much money do house flippers make in Mississippi?
The average revenue per flip in the US is $60,000, while in Mississippi it’s just around $40,000. This means the average revenue per flip in Mississippi is $20000 less than the national average. I mean it makes sense. Affordable housing and improving quality of life attract a lot of real estate investors in this state which ultimately leads to more competition and thus lower revenue per flip.
Furthermore, it is also important to understand that the revenue per flip is not the net profit. You will also need to allocate some money for repairs and renovations. There may be a wide range of repairs necessary depending on the current state of the home, but even if you spend $15,000 fixing up the home. Once you deduct all other costs and charges, you will be left with a net profit of around $5,000 to $10,000.
Thus, it is safe to assume that, on average, you can make at least $5,000 by flipping a single house in Mississippi. Furthermore, an average real estate investor flips around 4-5 houses per year. That means you can expect to make around $50,000 per year by flipping houses in Mississippi full-time.
Overall, flipping houses in Mississippi is an excellent way to begin investing in real estate. Mississippi is fast expanding and has a lot to offer its citizens, even though it is one of the least profitable states for flipping houses. Furthermore, discovering lucrative flips in the Hospitality State necessitates a blend of your skills, expertise, and chance. Once you’ve found a fantastic deal on a house in Mississippi, be sure to plan ahead of time, restore the property as needed, and sell it to a high-end buyer.