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As of 2020, nearly 6% of all home sales were flipped homes. If you want to become a house flipper, it's vital to know how to proceed. In particular, you must understand the importance of a desirable location, selecting a potentially profitable home, and financing with the right lender to help you realize more profits when flipping houses as a senior.
The experienced business and real estate attorneys at the Zara Law Group offer these tips.
As a senior preparing for your first flip, research the process extensively. Look for reputable online sites for information. Read books written by experts. Absorb knowledge from any seasoned flippers you know. Flipping can be profitable, with the average house-flipping profit being $60,000. However, this doesn't factor in the cost of repairs and other expenses, which may be more than your profit. When you understand flipping well, you're more likely to avoid common mistakes that affect your yield.
You may want to reap the maximum reward when flipping a house, especially since this is your first senior flip. However, you may pay the price if you choose a home that needs major fixes, such as foundation repairs, significant mold growth remediation, or electrical work. While you may save on the cost of the house, you can easily spend those savings on paying for repairs. Bear in mind, now that you're in your senior years, you don't want to get into a high-money project that may affect your retirement savings.
As you're looking for your first house to flip and are estimating repair costs, add 20% to the estimate. This ensures you can make a profit on the house and have enough for the repairs. Tracking costs and labor can quickly get overwhelming, so be sure to have an easy to use accounting tool at your disposal. This will save you time and money by helping ensure that your house flips stay on budget.
Although you may find a low-cost home and be able to improve it immensely to increase its value, it may be difficult to sell it if it's in an undesirable location. This is particularly true if the price you're asking is higher than that of other homes in the area.
Ideally, you want a location in a safe area in a good school district. It also helps if the property is near amenities.
Performing a few upgrades can boost the value of a home. However, hire professionals as necessary, especially if you want to spend time enjoying your retirement.
Certain upgrades, such as a kitchen renovation, are more likely to increase home value. Once you begin this improvement, consider hiring an adept plumber to address any damaged or leaking pipes. Use online reviews to compare plumbing specialists, and make sure the plumber is licensed and insured. Expect to pay between $45 and $150 per hour for plumbing services.
Select a cost-efficient mortgage for your particular situation. For example, look into a Veterans Affairs mortgage if you're a veteran. Moreover, certain lenders offer special mortgage programs for seniors.
Think about forming a limited liability company (LLC) for your senior flipping business, so you receive tax breaks and reduce your paperwork. You may establish an LLC through an online service, which is convenient and affordable.
While flipping a house can seem daunting at first, you can make your first flip as a senior fruitful by knowing a few tricks of the trade.
Whether you're starting a business, moving offices or relocating to Illinois, have an experienced business and real estate attorney that has the experience you need to assist you with all areas of your operations & real estate needs. For experienced real estate & business legal services in Illinois, contact our office to schedule a free consultation.
Zara Law Group has a long standing history of excellence in successful real estate closings. Real estate closings can be stressful for those who aren't properly prepared. Our attorneys know real estate law and focus on the clients wants and needs. Call 708-365-8411.
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