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Tips to Help You Avoid Flopping When House Flipping
By Derek Goodman of inbizability.com
Many people prefer to relax once they’re retired. However, others like to keep busy while making some extra money – and house flipping is one of the best ways to accomplish both at the same time. Courtesy of Dr. Mara Karpel, here are some tips on how to get into house flipping, find the ideal property, and more.
Identifying the Right Property
First, you’ll need to find a desirable neighborhood. Look in areas where property prices are rising, and employment levels are high. You’ll also want to determine crime rate statistics in the area. Ideally, it should also be close to schools, local transportation, and other local amenities.
Once you’ve identified a desirable neighborhood, it’s time to speak with an experienced realtor with local expertise. The condition of the house is something else to take into account. You’ll want to avoid ones with structural damage and weak foundations, they’re likely to end up being a money pit.
Considering Expenses
Finance Buzz explains that the next stage is financing the project. Unless you’re lucky enough to be able to pay cash for the property, you’ll need to apply for a loan or mortgage from a bank or other financier. Seniors can apply for a mortgage the same way as anyone else. Most banks are only interested in your ability to pay back the loan.
Another option is seller financing, which is helpful if you can’t get a mortgage and involves the buyer having a loan agreement directly with the seller. Loans from family or friends are an option, as well. This way you may be able to avoid costly interest and fees and a lot of red tape and paperwork.
Home equity loans, where your own home is used against the loan, and unsecured personal loans that are issued based solely on your creditworthiness are other alternatives. Hard money loans are another option. They’re quicker but do come with high interest rates compared to other loans.
Sourcing Contractors
It’s now time to source your contractors. Unless you’re knowledgeable in home construction and remodeling, you’ll likely only be involved in cosmetic work such as painting. Family Handyman notes that renovations that add the most value include kitchen upgrades such as new countertops, state-of-the-art appliances such as a new range hood, and new windows. Refurbed bathrooms, decks and energy-saving improvements can often add value to a property.
Selling Options
To get the highest price possible, you’ll need to sell the property as fast as you can. There are several ways of going about selling your renovated property, such as selling it yourself, working with an estate agent, or through an auction. All have their own pros and cons, it’s just figuring out what suits your circumstances best.
You can further legitimize your business by forming an LLC. Registering as an LLC will have the added benefits of protecting your personal assets, less paperwork, and tax advantages. Instead of using an expensive attorney, you can work with an affordable formation service to set up your LLC.
Also, don’t forget to advertise! One of the cheapest and best ways to do this is by sharing pictures and videos of your property via social media. Take advantage of free resources whenever you can, as well. For instance, if you record videos of different rooms separately, you can use this free tool to quickly combine videos and share them via the platform of your choice.
Flipping for a Profit
If you enter the world of house flipping with your eyes closed, you’ll likely get your fingers burnt. By following a few simple rules you can enjoy both your retirement and the extra income that comes from a successful house flipping business.
Check out the author, Derek Goodman, at inbizability.com.
Dr. Mara Karpel is a clinical psychologist, practicing for almost 30 years, radio show host, and author of the book, “The Passionate Life: Creating Vitality & Joy at Any Age,” now available on Audible.
