House flipping can be a lucrative business venture, even for seniors. Data shows that the average flipper can get over 40% gross profit on one house, so even if you've retired, you can generate substantial profit. It’s not as straightforward as it may seem, but if you keep in mind some essential tips, you can flip houses successfully.
- Start a Business
Not all house flippers start off fix-and-flipping as a business. However, forming a business like an LLC establishes marketability, can diminish the risk to your personal assets, and can grant you special tax benefits. You should also generate a Florida operating agreement in writing when forming your LLC. This document explains how your business is managed, to what degree key staff are involved, and how finances are handled. Even though most states don’t require the operating agreement to be written, it’s good practice to have a record of your intentions, especially if you're going in with a partner.
- Improve Your Skill Set
Do you have experience with construction, real estate, or finance? Some expertise will help, but getting your real estate license to gain a deeper understanding of the process, help you find better deals, network, and reduce closing costs. Regardless of your decision, you can't do it all yourself. Seek out experts to provide the skills you're missing. Plus, if you partner up with contractors, you could save on costs while promoting their business.
Though these skills won’t be completely relevant until you’re preparing a home for sale, adding to your cleaning skills and techniques will help ensure that your house commands the best price. Plus you can discover more environmentally friendly ways to clean a space. Being greener where possible is always a positive.
- Find the Right Property
When searching for the right property, you need to understand the market as a whole. It’s not just about finding a viable house to renovate. Many of your selling points have to do with the neighborhood, including school quality, access to amenities, commutability, and safety. You could even check in with the city planner to see if there are any projects in the works that will affect the neighborhood's value.
When looking for the perfect investment property, your best option is always to work with an expert realtor who can help you find exactly what you’re looking for.
- Fund Your Endeavors
You can still flip houses without much capital of your own by wholesaling or working with a wealthier partner. If you decide to partner up, consider working with a younger, energetic person who can handle the fast-paced, complex nature of flipping houses. Chances are you’ll need a loan, though. In order to secure a business loan, you’ll need a good business plan to make your case. Lenders want to see that you have a clear, detailed plan for each property.
- Market Your Houses
If you’re renovating houses yourself, you’ll need to find ways to market your properties. In addition to print ads, you could easily set up social media accounts that showcase your homes. And thanks to technology, putting together a solid marketing campaign is easy — and, in many cases, absolutely free. For example, if you’re looking to place an ad on Facebook, look for tools that can make this process easier. There are online templates that let you create a Facebook ad quickly — all you have to do is add your own images, colors, and fonts to transform these templates into great ads you can download and then display on Facebook.
- Work Efficiently
Never go into this without a plan. Each stage of the process will take a bit of time, so you need to have an understanding of the overall timeline to budget appropriately and work efficiently. Time is money when it comes to flipping houses. The faster your turnaround is, the less you’ll be paying on interest for loans, thus increasing your profit.
You can increase your efficiency by using software designed for home builders. This purpose-built software can help you refine your estimates for the cost of work on the home you’re flipping. This can increase your profit margins, enabling you to grow your wealth faster.
No matter where you're at in life, flipping houses can be an exciting, profitable career path. Even if you choose to only flip a few houses, you need to take steps to set up your business, find funding, and market your business with the help of free tools. Keeping these key tips in mind will help you make the most of your investments.
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Special thanks as always going out to Ms. Andrea Needham @ Eldersday.org for this fantastic piece for our blog!