Senior Success: Get in the Flipping Game
Here’s the deal: Retirement doesn’t mean you have to retire from life and all of the fun things you used to do. For many seniors, it means you are retiring from the things you have had to do to meet your obligations, both to yourself and to others. Now you get to seriously contemplate what you want to do, and for more and more seniors, that means starting their own business.
If you have a knack for architecture or interior design and can absorb the potential risks, a part- or full-time career in flipping homes may be right for you. Decide what type of homes you want to start out with — for example, those that need a lot of work but have high potential can be personally rewarding but may delay your financial reward. Take a look at the available inventory on Homesfield and then let the flipping fun begin!
Take stock of your financial assets
One of the first things you should do is speak with your financial advisor. You don’t necessarily need to purchase your real estate flipping prospects with cash; there is a train of thought that promotes the wisdom of OPM: Other People’s Money. While it can be a financial institution like a bank or credit union — particularly one you have a good relationship with — you have other options, such as investment partners or hard money lenders. Your experience in handling credit, especially if you have had real estate loans, is likely to earn you favorable terms.
If your financial advisor is concerned about the risk, start with a small flipping project and then show them a detail of your expenses and net gain. Once they feel better about the potential based on initial results, they can help you determine if you should allocate some of your current financial resources toward it as a business.
Don’t limit yourself
Just as with any investment, you may want to consider diversifying your real estate business of which house flipping is just one component. You can renovate a “fixer-upper” and keep it for a rental, either as a long-term home or listing it with one of the short-term rental platforms. This can feed a regular income stream back into the business to reinvest. Be sure you also invest in a professional photographer to market your home, whether for sale or rental, in its best light. With the amount of money and effort you are putting into this business, you really don’t want to simply take pictures on your smartphone.
The advice on not limiting yourself also applies to your time. Even if you are enjoying the business, you will need help. In addition to a real estate agent who firmly understands the market, and any savvy business partners you decide to take on, you should get assistance with some of the mundane but necessary business tasks, such as your accounting functions. Once you get started, you’ll come to know which contractors you can rely on to get the job on time and within your budget, with an eye to the type of quality you want your business to reflect. If you rent, you’ll want to employ property managers and home cleaners.
Even if you just have a handful of employees or regular contractors, an organized payroll system will be a timesaver — and perhaps a business saver. How? Well, software like this, for example, not only ensures that everyone gets paid efficiently with features such as direct deposit, but also correctly calculates and deposits your necessary payroll taxes, keeping you in the Internal Revenue Service’s good graces, and your business out of hot (tax) water. Remember, this is your “retirement business,” so don’t put your financial future at risk by not having a solid infrastructure in place — and don’t run yourself ragged trying to do everything.
Keep it flippin’ fun!
Working for yourself, particularly at this stage in your life, can be extremely rewarding, especially in a profession that you enjoy. The “before and after” aspect of house flipping is an attractive one for many interested in real estate, so enjoy it for as long as it’s fun for you. Stay on top of the ever-changing real estate inventory through Homesfield’s real-time inventory updates, and stay on top of your “retirement” world!