Real estate investing can be a rewarding journey, but success hinges on the right strategies and approach, especially in competitive and unique markets like New Orleans. From deciding whether to flip a property or hold onto it for long-term gain, to understanding the local market and working with the right team, each decision can make or break an investment.
Recently, I had the pleasure of speaking with Scott Matthews, a highly successful real estate salesperson and investor in New Orleans, on my podcast. In our conversation, Scott shared some invaluable tips that any real estate investor—whether a seasoned pro or beginner—can learn from.
You can watch the entire podcast episode here.
Now, let’s dive into some of the key takeaways from our discussion, and discover how Scott has built a successful investment strategy through a balance of smart decisions, strong relationships, and a deep understanding of his market!
Scott’s Tips on How to Be Successful in Flips and Holds
Scott’s journey into real estate wasn’t paved with immediate success. He knew from college that real estate was a path to financial independence, but like many of us, he had to start small. Over time, he honed his strategy, learning what worked for him and what didn’t.
Flipping vs. Holding: Making the Right Decision
One of the most critical aspects of Scott’s strategy is knowing which properties to flip and which to hold.
In our discussion, Scott emphasized his preference for multifamily real estate when it comes to long-term holds. Multifamily homes offer a more reliable cash flow, as they have multiple tenants, which spreads out the risk. If one tenant moves out, the other units are still generating income.
On the other hand, Scott explained why single-family homes rarely make the cut for his portfolio. The risk is higher because a vacancy means zero income, and managing multiple single-family homes becomes cumbersome. For him, single-family homes are strictly for flipping.
His business model focuses on flipping 90% of the properties that come through the door, and he only holds onto larger multifamily projects that offer better returns.
Key Metrics for Evaluating Real Estate Deals
When Scott evaluates a deal, it all comes down to whether it “pencils out.” This means looking at the numbers and determining if the investment makes sense financially.
As Scott explained, flippers in his market typically aim for a 35% return on investment. It’s important to know your profit margins and what will make the deal worthwhile.
Scott also highlighted the importance of understanding the cap rate, which is a key metric for evaluating the profitability of a rental property. A cap rate of 10%, for example, means the investor is making a 10% return on the property after accounting for all expenses, including management fees, taxes, and insurance.
Knowing these numbers can make all the difference in deciding whether to pursue a deal or walk away.
Building a Network for Success
Real estate is not just about numbers—it’s about people.
One of Scott’s biggest pieces of advice was the importance of building a strong network. He works closely with other real estate agents, wholesalers, and local lenders to find opportunities and close deals. Relationships are everything in this business, and over time, these connections can lead to some of the best investment opportunities.
For me, as a podcast host, I’ve found that podcasting has been a great way to build my network as well. By connecting with experts, like Scott, and sharing valuable insights through the podcast, I’ve been able to foster relationships with a wide range of professionals in the industry.
A professional real estate podcast production company has helped me expand my reach and make connections that benefit both my business and my listeners.
Overcoming Insurance and Lending Challenges
According to Scott, securing insurance in New Orleans can be a massive challenge, especially after the devastation caused by Hurricane Ida. Prices have skyrocketed, and older properties (particularly those built before 1980) are much harder to insure.
Despite these challenges, Scott continues to invest in the area by relying on mortgage brokers and local lenders who understand the specific market needs.
Unlike national lenders, local lenders are familiar with the intricacies of the neighborhood, which helps smooth out the financing process.
Scott emphasized that working with people who understand the local market is crucial when securing favorable loan terms and insurance policies.
Balancing Work and Life in Real Estate
One thing I admire about Scott is his ability to balance his work with his personal life.
In an industry where the pressure to work long hours can be overwhelming, Scott has set clear boundaries for himself. He works efficiently from 9 AM to 7 PM on weekdays but rarely works weekends or after hours. This balance allows him to stay sharp and avoid burnout while still running a successful business.
He advises other investors to adopt a similar approach. While it’s tempting to work around the clock, maintaining a sense of normalcy and separating work from personal life can be the key to long-term success and happiness.
Final Advice for New Real Estate Investors
For anyone new to real estate, Scott’s final piece of advice is simple: get started.
There’s no better way to learn than by doing. Whether you’re flipping houses or holding onto rental properties, every deal is a learning experience. Challenges will arise that no amount of preparation can foresee, but those challenges are part of the process.
Scott also spends time coaching aspiring real estate investors, offering mentorship to help them build their businesses. His emphasis is on learning through experience—no matter how much advice you receive, there’s no substitute for actually going through the process yourself.
Follow the REalizations Podcast for More Inspiring Stories and Proven Tips from Real Estate Experts!
Scott’s insights into flipping and holding properties, understanding key metrics, and balancing work with life offer invaluable lessons for any real estate investor. His approach proves that with the right strategies and determination, success is within reach.
If you enjoyed learning from Scott, be sure to tune in to more episodes of the REalizations Podcast, where I interview top real estate experts who share their stories and strategies for success. There’s always more to learn, and I’m committed to bringing you the best advice in the industry.
And, if you’re looking to buy or sell a home in the Bay Area, contact me directly. I’d love to help you navigate the market and find the right property or buyer. Let’s work together to make your real estate journey a successful one!
