Here are three key ideas of how to start house flipping using your retirement savings.
It’s well worth considering as it can become a source of income and purpose. Having fun and learning new skills.
House flipping is a great way to do something creative and fulfilling—that can also turn into a profitable side business. Of course, house flipping isn’t as easy as it may initially seem, especially if you aren’t prepared to take on such an extensive project.
In this article, we will talk about the three most critical aspects of how to start house flipping.
So, if you’re thinking about giving it a try, here are the essential things you need to know.
1. How to Pick the Right House
The three most important considerations are location, location, and location!
Pick the wrong house in the wrong location, and you’ll fail 100% of the time—especially if the market isn’t doing well.
The key to house flipping is knowing how to read the housing market and learning how to pick the correct type of house. The perfect place for flipping could be a location in an up-and-coming neighbourhood, where young professionals and their families are moving. Conversely, it could be an area where older folks are gravitating.
The neighbourhood should have a low crime rate and be within reach of essential services like health facilities and public transportation and for younger buyers good schools.
Additionally, you should choose a house that won’t need any major renovations or repairs. House flipping potential comes with some specific qualities, such as sturdy foundations and a good layout.
The last thing you want is to get stuck losing money because the house needs structural renovations, new electrics or piping.
2. How Much the Initial Investment Will Cost
The cost of flipping a home will cost approximately 10% of the purchase price. That means you need to have enough money to cover the home purchase plus 10%.
It’s best to have these funds in cash to avoid having to take out a mortgage that will end up costing you in interest and private mortgage insurance. Keep in mind how much house you can afford as well. That way, you won’t bite off more than you can chew.
It’s also a good idea to use financial tools like QuickBooks Online Advanced, accounting software that flexes with you. Quickbooks Online can help automate your budgeting tasks so you don’t overspend. You can also use it to generate budget reports in real-time and take care of payroll tasks for the contractors you’ll need to hire for the job.
3. How to Start House Flipping with the Right Crew
If you’re handy, there are probably several DIY renovation tasks you can take care of yourself—but keep in mind, house flipping isn’t the time or place to push your luck. That’s where the professionals come in.
Depending on how much work the house needs, you may require a primary contractor, painters, landscapers, home inspector, and possibly other specialists. To find the right people, you’ll need to do your research and conduct a few interviews.
Once you put the right team together, you’ll want to keep hiring them for future projects so you can ensure that all your houses-to-be-flipped remain consistent in terms of craftsmanship and quality.
When done right, house flipping can earn you a lot of money and, if done right, a good reputation. So, if house flipping is your next passion project, it’s time to roll up your sleeves and learn all you can about real estate and the housing market so you can pick the right house to get started.
Ready for an adventurous retirement? Check out the advice offered at Roving Retirement!