Flipping houses can be a lucrative business. However, it can also be risky if you don’t know what you’re doing and how to do it safely. If you’re looking to get into the house-flipping business as a senior, below are seven tips presented by DMV Real Estate Resources that can help you make informed decisions while avoiding any significant pitfalls along the way.
1. Find the Perfect Property
When searching for an ideal property, Nationwide points out that you don’t want something in bad condition. You want something you can renovate without spending more than it’s worth or taking too much time and effort on your part. So be cautious. When buying a fixer-upper and you’re pricing out costs, it’s a good idea to add 20 percent onto your estimate, especially for major repairs like electrical work, HVAC upgrades, foundation problems, or issues with asbestos or mold.
2. Always Have a Professional Inspect Your Potential Properties
Before you start looking for your next potential home to flip, find an experienced contractor or property inspector who can look over properties and identify issues before you buy them. A small investment in professional advice can save you tons of headaches and money later.
3. The 70% Rule
House flipping is a risky business, but one of its biggest risks is financial, especially if you don’t follow the 70% rule, which, as Kiavi notes, helps you determine the price to pay for an investment property. Ideally, you can spend up to 70% of the home’s post-renovation value minus renovation expenses.
4. Have an Agent List the Property
Trusted and experienced real estate agents like DMV Real Estate Resources can advertise and sell your property quickly and often for a better price than you can get selling it on your own. They know what buyers are looking for and may be able to provide advice or tips to help you ensure the house appeals to potential buyers.
5. Know Exactly What Improvements Are Needed
Before you buy, have a good understanding of what improvements you need to make. Renovating your property’s kitchen and bathrooms adds value to a home. Buyers are looking for larger, more luxurious kitchens and bathrooms, so renovating these rooms can make the home more attractive to potential buyers.
6. Senior Financing Options
If you’re a senior looking to flip houses, chances are you don’t have hundreds of thousands of dollars lying around. That means securing financing options becomes essential before investing in a house flip. Consider taking out loans or using retirement funds as a means of securing additional capital if you don’t have enough cash on hand. It’s also helpful to talk with your bank officer about refinancing options on your own home mortgage. They may lower your interest rate, making it easier for you to qualify for a mortgage loan on the house you plan to flip.
7. Formalizing Your Business
Consider formalizing your house-flipping business as a corporation or a limited liability company. Doing so makes it easier to find investors and loans. Operating an LLC has its own set of benefits. It gives you limited liability protection, meaning your personal assets are safe if your business experiences financial problems. An LLC also provides you with tax benefits. You can register your company online with ease using an affordable formation service.
Upward Market Trend
The market is on an upward trend. If you’re a senior thinking about entering the world of real estate by buying and flipping homes, now is the time. Remember to find the right property, get an inspection, enlist the help of a real estate pro, check into financing options, and form your business, preferably as an LLC. You’ll be flipping and making a new stream of income in no time!
For specialized, passionate service and support for mature moves In Washington D.C, PG County and surrounding counties, call on DMV Real Estate Resources. Team up with DMV today! 571.839.3740
Written By: Andrea Needham
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