House flipping has become a popular endeavor in recent years as more and more people look for ways to invest their money. In fact, according to Statista, house flippers in the US made a gross profit of around $67,000 per unit in 2021.
However, it’s not a business that should be entered into lightly. If you’re thinking of getting into this industry, there are a few professionals you should consult before taking the plunge. Here’s who you need on your team:
A Real Estate Agent
When it comes to flipping houses, there are a lot of variables to consider. From rehab costs to market conditions, it can be challenging to know where to start. A real estate agent will be invaluable in helping you find properties that are likely to offer a good return on investment.
They can also give you insights into the local market, which is essential when setting your sale price. For example, if you’re flipping a house in an area where prices are rising rapidly, you’ll be able to sell it for more than if you were flipping in a stagnant or declining market.
An excellent real estate agent will also have a network of contractors they can recommend, which can save you time and hassle when it comes to getting the work done. This is because they’ll already have relationships with reliable companies who can do the job quickly and efficiently.
A Contractor
Unless you’re an experienced contractor yourself, you’ll need to hire someone to oversee the renovation work on your property. Look for ones with experience in flipping houses, as they’ll be able to give you an accurate estimate of the costs involved and help you stay on budget.
In general, you’d need to consult at least three types of contractors: roofers, plumbers, and electricians. Here’s why:
Roofers
One of the most critical considerations when flipping a house is the condition of the roof. If the roof is in good condition, it will be one less thing you have to worry about when trying to sell the property. However, if the roof needs to be replaced, it can eat into your profits.
Roof installers can give you an estimate of the cost of a new roof and offer advice on how to extend the life of an existing roof. In addition, they can provide guidance on choosing suitable roofing materials for your climate and budget.
Plumbers
Plumbing is one of the most essential systems in any home, yet it is often one of the most overlooked. When it comes to flipping homes, many investors overlook the importance of a comprehensive plumbing inspection. However, consulting with a licensed plumber before starting your project can save you time and money in the long run.
A plumbing inspection can identify potential problem areas, such as leaks or blockages, and estimate the repair costs. In addition, a plumber can offer advice on ways to improve the home’s plumbing system, such as upgrading fixtures or adding additional drainage.
Electricians
Another important thing is the electrical system. Many homes that are being flipped will need some electrical work done in order to bring them up to code and make them safe for new occupants. This is why it is so important to consult with electricians before starting a house flipping business.
They can help you assess the electrical system’s condition and make recommendations for repairs or upgrades. Additionally, they can provide you with a quote for the work that needs to be done.
An Appraiser
Once the renovations are complete, it’s essential to have your property appraised so that you can set a realistic asking price. Overpricing your home is one of the quickest ways to kill your profits, so make sure to consult with a professional before putting your home on the market.
For instance, if you paid $200,000 for the property and put $50,000 into renovations, you might be tempted to list it for $325,000. However, an appraiser will be able to give you a more accurate estimate of the home’s value, which could be closer to $275,000.
While this may seem like a lower number, it’s important to remember that you’re still making a profit of $25,000. What’s important is that you are confident that you will be able to sell the property for more than your renovation costs, so you can make a profit.
An Insurance Agent
Flipping houses can be full of risks, so it’s important to have adequate insurance coverage. Your insurance agent can help you determine what coverage you need and make sure you’re getting the best rate possible.
When choosing the right insurance policy for your business, make sure to consider the following:
- Property damage coverage: This will protect you from any damages that occur to the property during the renovation process.
- Liability coverage: This will protect you from any lawsuits that may arise from injuries or accidents that occur on the property.
- Business interruption coverage: This will protect you from any financial losses that occur if you cannot complete the renovation project due to unforeseen circumstances.
Regardless of what type of insurance coverage you choose, make sure you are adequately protected before starting your project.
If you’re thinking of getting into the house flipping business, there are a few professionals you should consult first. A real estate agent can help you find potential properties, while a contractor will oversee the renovation work. An appraiser will help you set a realistic asking price, and an insurance agent will make sure you’re adequately insured. Consulting with these professionals from the start will increase your chances of success.