House flipping can be a very rewarding and profitable venture. If you’re interested in real estate and you’re looking for ways to stay busy and earn some money after retirement, house flipping could be a great business move for you. But before you start buying properties, making renovations, and raking in profits, it’s important to know what you’re getting into. House flipping isn’t as easy as it looks on TV! Let’s explore some things you will need to consider before flipping your first house.
Assemble Your Flipping Team
First, you need the right people on your side. Flipping a house involves coordinating a number of professionals, including money lenders, real estate agents, inspectors, contractors, insurance agents, and stagers. You may also need to hire specialized contractors such as Enguard Contractors for specific jobs like concrete work. Don’t try to do it all yourself! The people on your house flipping team will ensure everything goes to plan.
Formalize Your Business
If you’re serious about flipping houses, consider turning your venture into a formal business. Establish a formal business entity that offers liability protection. There are many opportunities for things to go wrong in the flipping business, and the last thing you want is to put your personal assets on the line in the event of a lawsuit or overdue business debt. Learn how to register an LLC in Colorado so you can do it on your own instead of shelling out the money for a lawyer. Using an online formation service like ZenBusiness is a great way to save money while keeping the process as simple as possible.
Prepare Your Finances
House flipping is an expensive business to get into. Preparing your finances is important for ensuring you can see your flipping project through to completion. First, you will need to get a loan. As Millionacres explains, the loan process is a lot different for flipping than when you’re buying a home to live in or rent out. You will need to go through a hard money lender rather than a traditional mortgage lender. Even if you can afford to buy the home in cash, getting a loan may be preferable in order to increase your buying power, protect your personal assets, and make it easier to pursue multiple fix-and-flip projects at the same time.
Identify Profitable Properties
Not every run-down property is worth flipping. The key to finding success as a house flipper is knowing how to spot the right property. The less work you need to do on a house and the faster you can sell it, the better your business can have cash flow. Networking with local real estate agents and investors is a great way to score deals on flip-worthy properties. You can also try attending real estate auctions and checking out foreclosed homes. When you’re evaluating potential homes to flip, look for those that require mostly cosmetic improvements.
Know How to Avoid Common Mistakes
It’s easy to fall victim to a number of common house-flipping mistakes if you’re new to this business. Make sure you’re aware of potential obstacles that could come up so you can avoid major problems down the line. For example, underestimating the cost of repairs and failing to make a budget can be dangerous in the house flipping business. Spend too much on improvements and you might not make a profit on your flip. You might even lose money! New house flippers also make the mistake of taking on homes that require too much work. Look for houses that only need a few things updated or you’ll be footing the bill for a long time before you can sell.
House flipping can be an excellent business venture for seniors. Whether or not you have real estate experience, try to learn everything you can about house flipping before you buy your first fixer-upper. There’s a lot of room for mistakes in this business, and the last thing you want is to spend a lot of time and money on a flip that doesn’t pay off. Thorough planning will get you far!
Looking for help with your house flip? Enguard Contractors offers a variety of commercial concrete services for all types of projects, from functional to decorative. Contact us today! (720) 580-2130