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Believe it or not, retirement doesn’t suit everyone. In fact, some people simply enjoy working while others want to earn a little extra cash. That’s where house-flipping comes in. It can be an extremely profitable side gig for seniors willing to invest time and money. If you’re curious about learning more, you’re in luck. Kari Haas has some tips and resources to help you get started in the house-flipping business. Continue reading for a Senior’s Guide to House Flipping.
Finding Your Ideal Property
To find your ideal property, start by:
- Employing an agent: They know the best areas for flipping homes. If you’re looking for rehab properties, HomeLight suggests hiring an REO agent.
- Look for auctions: If you’re looking for a good discount, estate and foreclosure auctions provide good opportunities.
- Short sales: Some homeowners need to sell their property quickly, sometimes for less than the amount owed on their mortgage. These are known as short sales.
Finding a Mortgage
There are several options when it comes to finding a mortgage. FHA 203 (K) is a type of government-insured mortgage that allows a borrower to take out a loan for the property’s purchase and renovation costs. Other options include a VA renovation loan, HomeStyle loans, and a CHOICE Renovation loan. The Kari Haas Real Estate Team has trusted mortgage brokers to assist you in finding the right fit for you.
Caution Is the Name of the Game
The primary purpose of buying a fixer-upper home is to save money on the purchase price. Still, it doesn’t always work out as expected due to unforeseen repairs and necessary renovations. When searching for a property to renovate, look out for certain red flags, such as structural damage or dry rot. Add 20% to your estimate, particularly for major repairs, such as electrical work, HVAC upgrades, foundation problems, or issues with mold or asbestos.
Formalize Your Business as an LLC
When starting a house-flipping business, consider forming a limited liability company (LLC). This business entity offers benefits when it comes to filing taxes and helps shield you from personal liability. Each state has its own rules and procedures for setting up an LLC. In most cases, it’s easy and affordable and can often be done online.
Now that you’re legitimately structured and ready to operate as a going concern, you’ll need to take initial necessary steps to get up and running. This includes drafting a business plan, setting a budget, and developing a marketing strategy. This strategy should involve digital marketing on social media, which in today’s day and age is essential. Fortunately, you don’t have to be a technological wiz; in fact, these days, you can easily design banners online then let them do the work for you. With free online templates, you’re able to customize and share posts in no time.
Renovations to Boost Value
Homes & Gardens notes that there are several options to add value to your property through renovations. For instance, you can upgrade the kitchen lighting or hood range over the cooking surface, or add insulation to the attic to make the house more energy-efficient.
Some renovations, such as kitchen remodels, add more value to a property than others. Remodeling a kitchen requires a competent plumber, especially if you plan to have pipes repaired or replaced. Plumbing services typically cost between $45 and $150 per hour. Before hiring, always take a close look at reviews and insist on only working with licensed and insured professionals.
If you plan to hire contractors for repairs or renovation projects or a property manager, it’s important to set up a payroll system before contacting them. Keep in mind that there are many payroll software options; just be sure the platform you choose offers automatic payroll scheduling, as well as automatic calculating and tax filing, in addition to same-day direct deposit and the ability to manage employee benefits.
Selling Your Fixer-Upper
When the time comes to sell your fixer-upper, find a real estate agent who’s as invested in selling your home as you are. When searching for one, ask for referrals from people you trust. Set a realistic sale price using a home estimate tool.
House Flipping in Your Senior Years
House flipping is an exciting side gig, and if done correctly, it can be considerably rewarding financially. If you can avoid the pitfalls, employ the right professionals, and deal with the finances, you can enjoy all the benefits of house flipping in your senior years.
Whatever your real estate needs, Kari Haas can help you reach your goals with confidence. Call 206-719-2224.
This post was written by guest blogger, Lisa Walker.
Image courtesy of Unsplash
