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Starting a business during your later years is often an ideal way to supplement your income. Seniors who want to earn greater amounts can take on a more substantial business plan such as flipping houses. Buying and reselling real estate may seem like a massive undertaking, but seniors who get into this business can make a tidy profit when they do their research and make wise investments.
Finding the right funding source is an important aspect of a house-flipping business, and this is where real estate investment lender Temple View can help. Built to specifically help real estate investors, Temple View understands the process and we can help find the right type of financing to make it work. Often house-flippers need to borrow enough money to make renovations; this can be a costly aspect of the process and requires careful consideration.
Making a profit while flipping houses requires business owners to buy homes that need repairs. Seniors who are in the business of flipping will need to use caution as they purchase homes to avoid getting into a situation in which the repair costs exceed the potential profits. Repair costs can be wrapped into the purchase price at Temple View, and in this blog post, we offer advice for cost-effective renovations.
As you explore a property to determine whether it is worth flipping, consider the type of renovations it would require. Structural renovations, such as foundation repairs, replacing rotting timbers, and jacking up an older home to fix a problematic basement are costly. If a repair is likely to increase your profit margin by enough to make it worthwhile, properties with structural renovations may be worth purchasing.
Seniors entering the business of house flipping can calculate the potential profit margins by using the 70 rule. Calculate the value of the home after renovation, multiply that amount by 70% and subtract the repair costs. This formula can help you determine how much you will need to borrow as well as the amount of money you could make on any given flip. You do not need to do all these tasks on your own. A property-flipping business often consists of a team to assist with the range of tasks.
Some properties hide their flaws well. To avoid getting into a situation that could be costly, consider hiring a reputable assessor to inspect each home before purchasing. Your team could also benefit from an experienced builder to complete the structural renovations on each property. The hourly rate and materials of these professionals also need to be factored into the loan calculations. You may also require an electrician, plumber, and roofer for those specialized repairs, and it is wise to have the property surveyed prior to purchase to avoid boundary issues with abutting properties. Cosmetic refurbishing is another factor to consider; hiring a painter or interior design person to assist with renovations may be a good idea.
When seniors start a house-flipping business, it is important to think about what business structure is best. Consider whether you will hire on an as-needed basis, offer employees a retainer, or contract with workers. Some employees may be full or part-time or paid per project. Establish a setup that works for your needs. If you plan to have rental properties, it may help to hire a manager to deal with rent collection, repairs, and screening tenants. With employees comes a need for trustworthy payroll services.
If you are a senior and have considered starting a business flipping houses, now may be a great time to get started. With careful planning, identifying homes that offer a decent profit margin, and hiring the right people to help, seniors can create a company that is lucrative and satisfying. The market is hot!
Contact us to learn how we can help with your financing today!