by Millie Jones
Are you thinking about taking advantage of all those years of experience fixing up your home to start a flipping business? As a retired senior, you can build a successful company renovating houses, but be cautious and understand what you are getting into before making any investment. Today, Tidbits offers some tips on how to stay savvy when you enter the flipping fray.
Finding the Right Investment Home
Locating the worst house in the best neighborhood is a good start. Work with a real estate agent who understands area markets and can search for low-cost options. Start slow and easy to make sure you are comfortable with the financial investment and the needed updates and confident of making a profit. Fixer-uppers may save you money on the initial purchase, but large costs for unrealized repairs can make for a bad investment rather than supplementing your nest egg.
Compare homes and look for easy fixes that can be done inexpensively and will enhance the space, such as removing walls. Simple DIY fixes like sanding and painting kitchen cabinets can change the look of the kitchen entirely without having to do a major overhaul. Have a contractor friend go through the home with you, or hire a contractor to inspect the home for money pitfalls and estimate the cost for repairs.
Give yourself a cushion by adding 20% onto your estimated costs to cover surprise repairs for electrical, HVAC, or foundation issues or if mold or asbestos is found down the road. When you are ready to make an offer on a house, consider all these costs. Discuss with your agent what you can expect at the reselling price and who to work with on the mortgage.
Preparing for Reselling
Timing is of the essence in getting your money back. Consider certain renovations to increase the home's value, but don't spend a great deal of time doing anything major. Kitchen and bathroom updates generally increase a home's value. Even a small kitchen remodel can cost around $21,000, but the return on investment is 81 % according to one report.
If moving or updating plumbing is required, hire a competent, licensed, and insured plumber, as this is one area you don't want mishaps.
Flooring is another item buyers are looking at, and new floors can increase the home's value up to 80% of the flooring cost. If your flipper has damaged, outdated or worn floors, this is a great place to spend your money and set your house apart from the competition.
When it is all done, selling your home for the right price is key to getting it turned over quickly. Having an ongoing relationship with your real estate agent is an advantage in working together to set the best selling price to make a profit.
Making It Official
If flipping works for you and you want to take on more projects, legitimize your business. Create a company name, file as a limited liability company, and design a catchy logo and website. Having a business card handy is a benefit when working with contractors, and establishing yourself as an LLC protects your personal assets and gives you tax benefits. You can also make your own business cards for free using existing templates, then pass them out to potential clients.
Starting out with a low-risk flip can build your confidence for future projects. Create a network of professionals to work with and have fun building a lucrative business in your senior years.
The first issue of Tidbits dates back to 1987 when it was published in Helena, Montana, as a twice-weekly paper, then later as a weekly. Today weekly editions of Tidbits can be found in over 250 counties in 33 states all across the United States and Canada. Call (319) 360-3936.