Updated: May 2
Many retirees are drawn to the prospect of flipping houses. Whether you want to add a bit of cushion to your nest egg, stay busy, or simply do something fun, flipping houses will do the trick. Not only is it an enjoyable venture — assuming you like purchasing, fixing, and selling stuff — but it can significantly boost your portfolio and wealth.
That said, house flipping requires sufficient capital, a lot of hard work, and smart decision-making. If you’re still interested, check out these tips from Winkelmann Properties!
Formalize Your Business
Your first step will be to change your mindset and view your house-flipping as a business. Otherwise, you will struggle to stay financially and legally organized, making it virtually impossible for you to succeed long-term. For instance, by setting up an LLC, you can ensure asset protection, tax advantages, personal limited liability, and many other benefits.
However, you will need to choose a registered agent for your LLC to receive specific legal documents on behalf of your company. You can be your own registered agent, but many investors hire a service to handle the legwork.
Plus, a registered agent service will relieve you of the need to be available for calls and emails during normal business hours. And it can save you from hefty fees and penalties by sending compliance reminders.
Establish Your Budget
As mentioned, you will need a good amount of money to finance your project from the beginning if you hope to gain a healthy profit in house flipping. Take time to research the various financing options available to retirees to determine which can serve you best. Also, establish a budget at the outset so that you can measure your decisions against it.
Learn How to Spot a Promising Property
Three primary factors will determine whether or not a property is worth flipping:
It saves you cash.
It comes with a sound structure.
It is in a top-notch location.
If a property offers these qualities, you can expect its appraisal value to rise after renovating and listing it. Take time looking at foreclosures, short sales, and auctions for houses that fall within or under your budget.
It’s also best practice to hire an experienced real estate agent who will help you find a great property within budget. Plus, an agency like Winkelmann Properties can introduce you to a wider inventory of potential properties.
Evaluate Renovation Needs
It’s critical to distinguish between necessary and unnecessary renovations when flipping houses. You can easily throw too much money into upgrades only to find it cuts into your profits.
Research the market to figure out what homebuyers expect, and base your renovation projects on those features. Some properties need some simple improvements to the landscaping and interior walls, while others require more extensive projects like repairing the roof or replacing hardwood flooring.
Work With Professionals
If you want to succeed in your house flipping endeavor, be sure to bring professionals with you on the journey. Working with a reputable real estate agent is a great start, but you will also want to find trustworthy contractors to perform your repairs and renovations. Start researching various contractors in your area and interview several candidates before choosing who to hire.
Put It Up for Sale
Once you've made all the necessary changes to your investment property, it’s time to put it on the market and make some money! Thoroughly research property values in your area to establish a competitive list price. Your realtor should also be able to help you price and promote the house effectively so that more potential buyers take notice.
If you are a retiree with a healthy amount of investment capital, flipping houses could help you diversify your portfolio, supplement your income, and give you something fun to do with your extra time. Just be sure to follow the tips above as you lay the groundwork for your real estate investment business. You could be purchasing your first investment home and making a pretty dollar in no time!
Are you looking to buy or sell a home in the Arlington, VA area? Contact Winkelmann Properties today! (703) 850-5223.