Starting a House Flipping Business – Business Plan Template
What is the estimated capital I will need to start my house flipping business? Will the house be placed for rent for starters or will I outrightly sell the property after the renovation process? How do I intend to raise the capital that I will invest in this business? The correct answer to these questions will form the basis of your business plan.
The loan can be disapproved based on the bank’s discretion. You can also source for capital from SBA, but with the condition that you provide them with collateral and also a down payment for the loan. You can as well source for financial opportunities like home equity loan.
Lastly, before making payment for the purchase, you have to consider the Cost of Renovation. You have to make an estimate of how much it may cost you to renovate the house before you sell it. You have to get the estimate for the market value of the house after renovation. A realtor can help you with such estimate. This is to ensure that after you subtract the purchase price and the amount you will spend on renovation, there will still be enough profit left.
Step 1. Business Plan
The step to starting any successful business venture is to draw up a business plan. The business plan is a map that turns your ideas into reality. For this house flipping business, your business plan must answer the following questions; how many properties do I want to purchase?What is the estimated capital I will need to start my house flipping business? Will the house be placed for rent for starters or will I outrightly sell the property after the renovation process? How do I intend to raise the capital that I will invest in this business? The correct answer to these questions will form the basis of your business plan.
Step 2. Source For Capital
It was mentioned earlier that a house flipping business is capital intensive, meaning that you may have to source for the loan to finance the business. Some ideal places to source for loan to start a house flipping business are; a bank- where you can be provided with loan to start up your business but you may have to provide them with details of your business plan.The loan can be disapproved based on the bank’s discretion. You can also source for capital from SBA, but with the condition that you provide them with collateral and also a down payment for the loan. You can as well source for financial opportunities like home equity loan.
Step 3. Apply for a Business License
You need to get a business license so that you can legally operate your business in your chosen location. Also, you may need to obtain a real estate sales license to secure the permit to operate your house flipping business. Remember to operate your TIN from the Internal Revenue Service IRS for proper calculation of tax payment.Step 4. Purchase Properties
The idea here is to purchase a property at the lowest possible price to enable you to get profit when you flip the house. You can use the services of a real estate broker to source for properties that are up for sale but you may have to pay an expensive commission for the commission for every successful transaction you make. I prefer to use the services of an estate broker when selling a property other than for purchase. Another option you have is checking out local properties that are up for sale; sites like www.reatlytrac.com and www.zillow.com are some sites that showcase local properties that are up for sale.Step 5. Renovation
For the renovation, you have to engage the services of the following service providers; Construction Company, Painter, electrician, Plumber, HVAC, and an Architect. Each of the service providers will handle an aspect of the renovation work according to their areas of specialization. Just ensure that you bargain to get the best deals.Step 6. Source For Buyers
After you have renovated the property, it is time to put it out for sale. One thing with real estate properties is that most times, it takes months or even years to find a good buyer that will buy the property the price you want to sell. As long as you are not in haste to sell the property, you can make a massive profit for the sales if you are patient enough, New Casa Painters (for Painters in Burnaby, BC).Lastly, before making payment for the purchase, you have to consider the Cost of Renovation. You have to make an estimate of how much it may cost you to renovate the house before you sell it. You have to get the estimate for the market value of the house after renovation. A realtor can help you with such estimate. This is to ensure that after you subtract the purchase price and the amount you will spend on renovation, there will still be enough profit left.
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