Charlotte Meier
House flipping refers to the act of investing in a house to fix it up and quickly selling it for a profit. If you are smart about it, house flipping can be a straightforward way to make some money quickly. Even better, flipping generally does not require any previous experience working in the real estate industry. As a result, this can be a good investment opportunity for older people looking to do something different to make extra money.
Here are some great ways that older adults can find success with house flipping, courtesy of List Flips.
Find Suitable Properties and Set Up Your Business
Finding a house that is suitable for flipping might take a bit of work. However, the internet can help in a lot of these situations. You can use List Flips for a searchable database of homes in need of flipping. And once you have renovated your home, you can list it here, too!
To find a suitable property to flip, consider neighborhoods that are growing and that will continue to see property values rise. The location of a property is one of the few things that you cannot change while flipping, so pay close attention to this detail. In addition, it is helpful to seek out houses that are in need of repairs, in order to maximize your profit. Homes that need work usually sell at a lower cost and have more room to grow as far as making a profit.
Once you’ve found homes to flip, you might want to set up your own business. Forming a limited liability company will give you certain legal protections and tax benefits. You can easily set this structure up yourself or you can work with a formation service that will complete all of the paperwork for you.
Secure a Mortgage
Typical home mortgages take a long time to pay off, sometimes as long as 30 years or more. When dealing with a fix-and-flip property, you do not have as much time to pay off a loan. While you may be able to find a mortgage with better terms, it is wise to consider other financing options. These include:
- Finding a partner who is excited about the project and is willing to provide funds to get started
- Taking out a home equity loan
- Using personal loans or funds that you may have saved
- Securing a business line of credit
Learn About Renovations
Renovations are a huge part of the investment when you decide to purchase a house to flip. It is a general rule of thumb to factor in the cost of renovations into the price of the house you purchase to flip. Kitchen and bathroom remodels often lead to higher profits since there are many appliances and other technologies that go into those rooms. Make sure the spaces are functional as well as beautiful. For instance, install a new under cabinet or island range hood in the kitchen to ensure unwanted cooking smells and smoke don’t become a problem.
Having a firm budget for renovations also helps with being able to profit off your fix and flip purchase. Leave at least a 20% wiggle room in your budget to account for unexpected costs and major upgrades, including mold issues, electrical replacements, and air conditioning work. While purchasing a home to flip can seem like an easy way to make money, keep in mind that unexpected repairs can crop up.
Speaking of renovations, chances are you’ll need to address problems if you purchase an as-is home. Generally speaking, as-is homes require a significant amount of work in order to be livable; this can be expensive, time-consuming, and stressful. Additionally, as-is homes may have hidden damage that is not immediately apparent. For this reason, it is essential that buyers do their due diligence before purchasing an as-is property.
Know How to Sell
At the other end of the house flipping journey is knowing how to sell the home for a profit. While most of this work is done by renovating a house in a good neighborhood, it is still important to know some other pointers. This includes reaching out to the right audience and knowing what your buyers want.
You should also set yourself up with a few PDF tools that will make the process easier. You may consider this option to convert various file types to PDFs for free. Once they are converted, you can add signature fields to enable e-signatures to simplify many different contracts.
Consider a Career in House Flipping
House flipping can be a great business for older adults, or anyone, as long as they follow some guidelines. Remember to learn about renovations (including as-is homes), research information about securing mortgages, research neighborhoods before speaking with an agent, By using these tips, you’ll soon find success.
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