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Currently, around 51 percent of U.S. small businesses are run by people age 50+. Launching a house-flipping business in Chicago could be a great choice if you want to join their ranks. There’s plenty of earning potential, and it comes with ample flexibility. You can set yourself up for success by using the right approach. Here’s how to get started.
Get Your Business Set Up First
While launching a property search is likely more fun, you want to take the time to set up your business in Chicago. You’ll need to create a business plan and choose your structure.
While many business owners go with an LLC because of the asset protection and tax advantages, it’s critical to look at the whole picture. For example, the operating agreement is a crucial part of the equation. It establishes with Illinois how you control your business, including everything from functional to financial decisions.
Along the way, you’ll also need to get an EIN for tax purposes. Additionally, you’ll want to get house flipping insurance. That way, you’ll have even more protection.
As your venture takes on employees, you may be wondering how to stay on top of payroll. Investing in payroll software at the outset makes processing payroll in a consistent and timely manner easy. This will leave you with more time to tend to essential tasks.
Pick Properties With Potential
Choosing properties is often one of the most enjoyable parts of house flipping, but it’s also one of the most challenging things to get right. You can’t just pick a house in disrepair; you need to be strategic about your decision.
Keep in mind that location always matters. Focus on established or up-and-coming neighborhoods that are attracting buyers en masse. Then, look for the worst house on the best block and see if it has flip potential.
Often, the easiest way to begin is with a home inspection. That way, you can determine if there are high-cost issues with low ROIs lurking beneath the surface. Foundation issues are notoriously expensive to fix and typically offer poor returns. The same can be true for electrical, plumbing, and HVAC system overhauls.
While avoiding all of the high-cost, low-ROI problems aren’t typically realistic, make sure that most of what you’re repairing doesn’t fall in those categories. Using that approach gives you the best chance of turning a profit.
Buy Properties Using the Best Approach
Once you find the right property, you’ll need to buy it. Covering the purchase and any repairs or updates with cash is often ideal. It allows you to bypass interest and speeds up the closing. Plus, it could make your offer more attractive.
If that isn’t an option, you can finance instead. A traditional mortgage may work if you can cover the cost of repairs with cash and the house is considered habitable. Otherwise, you might need to look at renovation loans or hard money loans.
Update the Home Strategically
Once the purchase goes through, it’s time for the updates. Begin with the high-cost, must-do repairs to ensure you can cover those costs. Some examples of fixes in this category include:
● Foundation repairs
● Roof replacements
● Structural fixes
● Plumbing updates
● Electrical work
● HVAC system repairs
Essentially, you want to start with the structure and core systems. Then, move forward with the other updates.
There are low-cost changes that back a big punch. New paint and flooring are incredibly impactful and don’t cost a bundle. However, you want to make sure that the kitchen and bathrooms impress, as those are areas that buyers focus on when choosing homes.
Get a Ready for the Sale
Once you have the house ready to sell, it’s time to stage it. Lettuce Organize can bring in extra furniture to give the house an ideal look for prospective buyers.
While selling on your own might be tempting, it isn’t the best approach. By partnering with a leading Chicago real estate agent, you’ll have an ally by your side. They’ll help with pricing, marketing, offer assessment, and more, ensuring you get top dollar quickly. Plus, they can help you find your next flip, allowing you to keep your business moving forward with ease.
Lettuce Organize® LLC is a unique service, providing solutions to all client's organizational needs for a healthy life. Lettuce Organize® LLC will increase customers' appreciation of time and organization to provide them with a less stressful and healthy lifestyle.
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Author: Jim McKinley
Moneywithjim.org
jim@moneywithjim.org