In 2021, the real estate market soared. While it may slow in 2022, there’s still a ton of potential for investors. That’s why it can be an excellent option for seniors that want to launch a successful house flipping business.
While you may be tempted to hop right in and look for properties, that isn’t the best way to begin. Technically, the first step you’ll want to take is setting up your company. By forming an LLC to act as your registered agent, you get tax advantages, flexibility, and less paperwork, all while reducing liability. Plus, you can handle the formation affordably using an online service, making it cost-effective and convenient.
After that, it’s time to focus on your operations. If you’re ready to launch a successful house flipping business as a senior, here’s how to make it happen. Start by reaching out to real estate agent Kersten Reed Bowman at Corcoran Reverie by calling (251) 455.8177.
Handling the Funding for Your House Flipping Business
Depending on your financial situation, paying for homes and renovations in cash might not be plausible. Fortunately, some alternatives can work.
One of the main options that are worth exploring is renovation loans. If you have a mortgage on your current house, you may need to focus on options designed for investment properties. However, that isn’t always the case.
If a mortgage isn’t an option, Experian notes that you could explore hard money loans. Those are short-term forms of financing, and while they usually come with higher interest rates, they can be a viable alternative.
Finally, you could look for private investors for your house flipping business, too. Whether that means turning to friends and family members or looking outside of your social circle, it could be a way to secure enough cash.
Choosing a Property to Flip
When you need a property to flip, two approaches can work. First, you can look for the worst home in a highly desirable neighborhood. If it’s fallen into disrepair while the rest of the community is in great shape, it could represent a solid opportunity if the price is right.
Second, you can focus on up-and-coming neighborhoods. With this, finding a bargain is still a necessity. However, what’s working for you is rising property values. It could be a great approach if the area is trending upward and the average property condition is improving.
Ideally, you want to select a property where the cost of the home with renovations is far below the eventual selling price. Focus on houses with good bones, as repairing roofing, exterior walls, and foundations are costly and won’t always get a solid ROI.
Additionally, find homes that have what today’s buyers want. Enough bedrooms and bathrooms are essential, while open layouts aren’t musts but can be beneficial. Similarly, home offices are hot right now, so choosing a property with room for one could be wise.
Picking the Right Renovation Projects
In most cases, you’ll encounter two kinds of projects when flipping. First, you’ll need to tackle anything that could cause the house to fail the home inspection. This includes dealing with the core structure elements – such as the roof, exterior walls, and foundation – and key systems like electrical, plumbing, and HVAC. While these efforts may end up buried in the walls, they’re musts if you want the property to sell fast.
After that, adding value is essential. Crescent Lenders suggests focusing on projects with a solid ROI. As the saying goes, kitchens and bathrooms sell houses, so you may want to begin there once the property is dried-in. You also want to avoid projects that hurt the home value. Otherwise, you may have trouble finding a buyer or getting your preferred price point.
Selling the Home After the Updates
Unless you previously worked in real estate, getting an agent is usually your best bet when it’s time to sell. For one, it lets you focus on the core part of your business – flipping properties. Second, it ensures you have an expert by your side who can oversee the process and secure a buyer.
Getting the home staged is also a wise move if the house is vacant. That way, buyers can see how the spaces work, making it easier to envision them living there. While both a real estate agent and a staging company are investments, they can help the house sell faster and for more, making them worthwhile.
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Kersten Reed Bowman of Corcoran Reverie helps her clients every step of the way to making their homeownership dream a reality. Team up with Kersten today! (251) 455.8177