House flipping has never been hotter. If you’ve been thinking of getting into flipping houses in retirement, there are some key points you should know to help your venture be a successful one.
if you’re thinking about making some money with house flipping, check out these tips:
Find Quality Properties
Flipping houses is about making money, so finding the right properties is imperative. You want something in a good neighborhood that is close to schools and has a low crime rate. Consider areas that are up-and-coming but are not the priciest locales so that you won’t have to pay steep taxes for the period that you own the home.
Experienced home buyers know to avoid homes with serious issues, such as cracks in the foundation, plumbing problems, electrical issues or widespread mold. A lack of adequate bathrooms is also a deal breaker for many homebuyers. For a small home, one to one-and-a-half bathrooms may be fine, but for bigger homes, more bathrooms are necessary if prospective homebuyers are going to even consider looking at the property.
Find properties that have good bones but could benefit from some updating. Things like fresh paint, new flooring, modern appliances and hardware, and refreshing landscaping can make big differences, and as Cheatsheet points out, these upgrades come with low costs.
If you have the money to purchase homes to flip outright, you can. There are benefits to having that kind of cash when flipping houses since many that can be bought for cheap in auctions require cash. If you don’t have your own funding, though, getting a loan is an option.
Using hard money. Hard money loans are more costly than traditional loans, but they have their perks. They aren’t based on the borrower’s ability to pay back the loan or credit history. Instead, the loan is based on the collateral the loan is being used for.
Because hard money loans don’t have the requirements typical to traditional home loans, they can be used for homes in disrepair. You can borrow the amount that the home is estimated to be worth once you’ve flipped it, so you have money to complete the repairs you need. They also are speedier than a conventional loan since there is less red tape. This is especially important because the longer you pay on the loan, the less money you earn on your flip.
Know When to Outsource
Finishing the project as quickly as possible is vital to making money flipping houses, so learning to outsource when it’s beneficial is vital to your success. This means engaging professionals to complete work that you aren’t entirely sure how to do well yourself. It may seem costly in the short term, but if it saves you time and gets the project done in a professional manner, it is worth it to make the investment. Furthermore, Bob Vila notes that if you want to make flipping houses a business, there are often repairs beyond your expertise. Plus, you won’t be able to complete all of the repairs yourself simply because the time won’t be there.
Outsourcing isn’t limited to home repairs and landscaping, though. If you are using contractors and other employees, you’ll need to set up payroll for them. Luckily, there are online services that can take on the burden of payroll for you. Research options to see one is right for you, paying special attention to perks that might be beneficial to your business, such as direct deposit options and automated taxes. Some payroll services even allow you to set payroll to run automatically, so your workers never miss another payday. This will keep contractors feeling motivated to get the job done.
Flipping houses can be a lucrative and satisfying business to be in. Find the right properties, fund them wisely, and know when to delegate to other professionals; you’ll be a successful flipper in no time.
Blog writen by Emma Grace Brown