How to Excel as a Senior House Flipper
The housing market is booming! That means ample opportunities for house flippers, making it an excellent business option for seniors looking to boost their income. Overall, AARP notes that companies founded by people age 55+ succeed more often than those started by younger individuals. However, that doesn’t mean you don’t have to approach your business correctly. If you want to excel as a senior house flipper, here’s what you need to know, courtesy of Renovation Face Time.
Forming an LLC
Technically, it’s possible to start flipping houses without formally launching a business. However, operating as a sole proprietor has its drawbacks, making it a potentially poor fit.
In many cases, it’s better to formalize your business. Going with an LLC reduces liability and gains access to tax benefits. Plus, it’s a flexible option with less paperwork, and you can even simplify the formation itself by using an online service.
Marketing Your Properties
If you have multiple properties, you might consider putting up a website and offering a newsletter that highlights the various properties you offer, as well as their amenities. Make sure you include plenty of high quality photos and updated contact information! It’s a good idea to format your newsletter as a PDF to make it easier to share; here’s a tool to convert to a PDF file if you need it. You could also share your images on social media to further spread the word.
Getting the Funding You Need
Most seniors know that homes aren’t cheap. While buying with cash and covering repairs out-of-pocket is often ideal, that doesn’t mean it’s practical for everyone. If you don’t have the money to fund your flips, you’ll need to look at other options. Some worth considering include renovation mortgages, hard money loans, and private investors. If you go with private investors, make sure you formalize any arrangements. That way, you know precisely what they’ll provide and what they expect in return.
Buying the Best Properties to Flip
Buying flip properties isn’t the same as purchasing a home to live in long-term. Generally, you want to find the worst house in the right neighborhood. Focus on established areas that buyers favor or up-and-coming spots with potential. Then, find the homes in disrepair in those parts of the city.
Once you find a property with potential, consider extending an offer. Then, get a home inspection to learn more about problems, allowing you to determine what you’ll need to fix. After that, use renovation estimation tools to determine how much repairs may cost and get an idea of how much profit is possibly there.
Generally, you want to keep the total of what you spend at or below 70 percent of the sale price after the updates are done. That gives you a reasonable buffer and makes the effort worthwhile.
Updating and Repairing the Property
Once you have the property, begin by tackling any repairs that may prevent you from passing an inspection. Usually, issues with the structure or core systems are the main reasons people fail, so you’ll want to begin there.
After that, choose projects to make the house appealing to buyers. Repainting and installing new floors are a great place to start. You may also want to update the kitchen and baths, as well as boost the curb appeal. If you’re remodeling the kitchen, consider investing in a wall-mount range hood to keep the air cleaner.
If you’re not sure what aesthetic updates will catch the eye of buyers, research comps in the area, especially recently renovated properties that sold quickly. That will give you an idea of what buyers want, making them excellent sources of inspiration.
Selling the House
When it’s time to sell, you usually have two choices. First, you can sell it yourself. That might be simple if you previously worked as a real estate agent. However, if not, keep in mind that an FSBO sale usually brings in less money and requires more work from you.
Otherwise, partner with a real estate agent. You’ll get ample support, ensuring you can easily navigate the process. Plus, they can make finding your next flip easier, allowing you to move forward to your next project quickly and efficiently.
Flipping houses is a terrific way to earn extra income as a senior. Research properties, find a mortgage, make necessary repairs and upgrades, and consider forming and marketing an LLC for your house-flipping business.
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