The real estate market is booming in most of the country, and if you’re retired, you may be thinking about investing in properties and reselling them for profit. In order to make your house-flipping venture a success, there are a few things you should consider beforehand. From launching your own business to finding the right people for the job, here are three steps you’ll need to take.
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Form an LLC
If you want to start flipping houses and make an income after retirement, forming a limited liability company is essential to ensure your personal assets are protected should you ever incur losses or face a lawsuit. As an LLC, it will also be easier to borrow money from lenders and investors in order to finance your home purchases and renovations, and if you’re starting a business with other partners, the rules you all agreed upon during the LLC formation process will help prevent possible arguments.
Don’t forget to appoint a registered agent who will be available during business hours to receive important documents such as tax notices, and who will keep track of report filing deadlines and other state requirements. By staying organized and in compliance with state law, you’ll avoid potential fees and penalties, and you’ll have peace of mind when you’re out and about working on your house-flipping project.
Find a Real Estate Agent
To find a house for sale that will give you the best return on investment, work with a real estate agent who’s highly familiar with the area you’re considering investing in. A professional should be able to tell you which neighborhoods offer the best opportunities for making a profit. Real estate pros have access to invaluable information when it comes to researching how much a house is actually worth, and they can even forecast the potential value of a home once renovated. And when it’s time to put your freshly-redone property up for sale, a good real estate agent will be able to cast a much wider net and attract more potential buyers than if you try the for-sale-by-owner approach while making sure you get a fair price for your house.
Add Value to Your Property
Your house flipping business will only be a success if you actually make money off your investment, so you have to make smart decisions when it comes to renovations. Start by establishing a budget for your flip, which should include the cost of buying the house plus all necessary repairs and cosmetic fixes that will add to its curb appeal and overall value.
Once you and your real estate agent start the buying process on a house, get a home inspection: a qualified home inspector will look for any problems such as mold, mildew, or foundation damage, and focus on areas of concern like a leaky roof as well as electrical, HVAC and plumbing issues.
If the seller isn’t willing to pay for repairs, you can decide if the benefits of renovating and flipping that particular house outweigh the financial risks. After purchasing your new home, find reputable, qualified contractors to fix, upgrade and renovate your diamond in the rough. And always ask for written estimates to avoid unpleasant surprises!
Investing in real estate after you retire has the potential to make you a lot of money. If you want to start a business flipping houses, form an LLC for your business, make value-boosting upgrades, and work with a great real estate agent can help you find the best properties to renovate.