Property flipping after retirement – 5 things to know
Once you retire, you may think of several possible side jobs that will help keep you busy while also bringing in some cash. There are many health benefits related to staying active both physically and mentally during your senior years. Retirement gives you all the time you need to try something new. One of those possible side jobs might be property flipping. If you are willing to put the time, effort, and money into flipping properties, it may be the perfect retirement side job. Before you start looking at fixer-uppers, there are a few things you will want to know about property flipping.
Learn the market
Before you dive into spending money and putting offers on houses, you need to learn your market because it is constantly changing. One year it might be a buyer’s market, and the other year it might be a seller’s market. If there are more houses on the market, it will be a buyer’s market, while the opposite would make it a seller’s market. When you are thinking of purchasing a home to flip, you will want to be mindful of both and what will be most beneficial financially.
Financing
You will want to have a complete layout of all the possible financial spending and potential profit. You need to consider what you will pay for the property and how much fixing the property will cost. There is a risk once you start fixing and flipping the property. There is the chance you will come across damage or mold that can make the spending increase. With all of that in mind, you want to make sure you still profit from the project.
70% rule
There is a 70% rule that is known in the property community. This rule can help you with your financial options as well. The rule goes that the flipper would not want to pay more than 70% of the after-repair value minus the repairs. This helps flippers estimate the maximum price they can pay for the property to turn a profit. There are still potential unexpected costs that can happen, so you will want to budget for all possible scenarios.
Negotiation
Negotiating is a significant factor when flipping properties. You will want to know when to negotiate, what is negotiable, and what is not. It is important to do the research before to make sure you get the most from your money. The property itself can be negotiated, and some repairs can be negotiated as well. You can offer various things in return for one.
For example, if the roof needs to be repaired, you can ask the seller to bring the cost down, knowing you will have to pay for the repair. It is essential to know your seller and the possible buyer once you flip while keeping your budget in mind. The point of flipping a property is to earn profit from the project.
The go-to team
You will want to have a list of potential third-party people that will help with the repairs. Prior research is essential, so you are aware of the kind of work they perform. You can compare quotes to know the price range for a specific project, such as plumbing or electric. Negotiation can help with finding the right people to help with repairs.
Conclusion
There is a lot of research that should be completed before buying property and flipping. You do not want to purchase a property and realize you cannot afford to flip and sell it. Making a profit is the key to property flipping. You want the repairs to be done the first time correctly, and you want it to be cost-effective.
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