The Senior’s Guide to Getting Started Flipping Houses
For seniors looking to start their own business in retirement, flipping houses can be a smart choice. Knowing where to start can be difficult, though, if you don’t understand the steps that go into launching a house-flipping business. Use this advice from Enriched Real Estate for getting your house-flipping business up and running.
Know What You Can Afford
Many people go into house flipping and lose money on it, so it’s important to know before you start how much you’re able to invest and have a general idea of how much renovations will cost. If you will be paying for the homes you are flipping out of pocket, it’s slightly less of an issue, but if you will be using a loan, you may want to research ahead of time the amount of money you’ll have access to.
Using an online calculator, determine how much mortgage you will likely be approved for. You also need to know how much money you can afford to pay toward that mortgage each month so consult your budget to ensure you aren’t overextending yourself.
Choose the Right Funding for Your Situation
While traditional mortgages are one option for funding your house-flipping, hard money loans and home equity loans are commonly used, as well. According to Experian, hard money loans are an option for those with less than desirable credit who have property they can use to secure the loan. Because these loans focus on the value of the property and not an applicant’s credit score or income, they can be an appealing option, but they do have higher interest rates and shorter repayment terms than other loans.
The Federal Trade Commission explains that home equity loans also use property to help get your loan funded. These loans access the equity in your current home which can be calculated by subtracting the amount you have left on your home’s mortgage from the home’s market value. Sometimes called a second mortgage, a home equity loan can get you the money you need, but your home is collateral and if you default on your home equity loan, you risk losing it.
Improve Your Business Acumen
Pursuing an MBA degree online offers a flexible and effective way to sharpen your business acumen, particularly beneficial for those looking to excel in the house flipping business. This advanced education provides a comprehensive understanding of business principles, finance management, and strategic decision-making, all of which are crucial in the real estate investment and renovation sector. By learning about market analysis, budgeting, and project management, you can make more informed decisions, manage risks better, and ultimately increase the profitability of your house flips.
Choose a Home You Can Sell
Understanding the market can be difficult for someone unfamiliar with buying and selling houses. Connecting with a quality Realtor and establishing a relationship can be a smart way to stay on top of available properties that will work for your needs.
You also need to avoid homes that have problems that will be expensive to fix such as foundation issues or a house worth of piping that needs replacing. A roof in poor condition can also be costly to repair or replace, so be sure to have any home you consider thoroughly checked before making an offer.
Content marketing can be a powerful tool in marketing your house flip. By creating engaging and informative content, you can attract potential buyers and establish your house flip as a desirable property. Start by showcasing the transformation of the house through before-and-after photos and videos, which can be shared on social media platforms and your website. Blog posts that detail the renovation process, highlight unique features, and provide home improvement tips can establish your expertise and build trust with your audience. Additionally, leveraging platforms like Instagram and Pinterest, known for their visual appeal, can help you reach a wider audience.
Marketing With Flyers
When you’re ready to sell, don’t just spread the word via social media and regular listing sites. You can greatly supplement these efforts with a free flyer template available online. If you aren’t sure how to get started with your design, there are plenty of templates that you can customize as needed.
Make Kitchen Upgrades
When you get down to the details, almost every house flipping project requires doing some work to the kitchen. Assess the age and functionality of the appliances, adding any that may be missing such as a range hood for the stove. You’ll also need to consider refinishing the cabinets and replacing the countertops.
Every business is a gamble, and particularly as a senior, losing your money and personal assets if your venture fails is an undesirable outcome. Choosing a limited liability company as your business’s formation can be a savvy move to ensure you and your assets are safe. LLCs grant their owners a layer of protection that other formations do not, and it has other benefits such as pass-through taxation and easy paperwork, as well. You’ll also have an operating agreement in place to help protect and guide your company. You can easily find out how to start an LLC using an online formation service, saving you the costs of a lawyer.
Don’t go into house-flipping without the foundation you need. Research best practices, assess your options objectively, protect yourself with an LLC, and make smart moves to get you and your business in the best possible position so that you can reap the rewards and get the money in sales that you deserve.