Trading houses for profit: who’s on your team?

To fix up and remodel a house, you will need the services of several professionals. And when planning to flip homes as a long-term investment strategy, you may see the value in assembling a great team of experts that you can turn to whenever you invest in another property. There is the real estate agent, of course, who will help you locate, buy and then resell your turnaround properties. Here are some other vital members of your flipping team.

mortgage broker

When you need money to finance your investment, a mortgage broker is a much better option than a bank. A mortgage broker has access to many lending institutions and is able to find you the best rate and terms. Banks offer one-size-fits-all mortgages and prefer the most profitable long-term loans to short-term loans. A broker, who has more flexibility, can find a lender willing to offer you a short-term loan and can also customize the mortgage to meet your needs. In addition to getting the best interest rate, a mortgage broker can get you a loan pre-approval letter. This document tells the seller of the house that you are a serious buyer with cash.

The best way to find a mortgage broker is through referrals from people you know. If you have a real estate agent, ask them who they would recommend. You will want a mortgage broker who has been in business for at least five years. When you meet with the broker, put your cards on the table immediately. Tell him you want to buy a property to flip and he may do it more than once. Some brokers will see a client like you as too much work. Other brokers will love you and will even give you a better deal when you come back for a mortgage on your next home.

You do not pay the mortgage broker for the services. Instead, the lender pays the broker a fee of 1% to 1.5% of the value of the mortgage. Your only costs are the property appraisal and credit report. If a mortgage broker requires an upfront fee, go to another broker.

counter

All sorts of tax implications are associated with buying and selling real estate. One misinterpretation of tax law and you could lose thousands of dollars. To meet your tax obligations and get the most out of the legal tax advantages available to you, you need more than an ordinary accountant to look after your interests. This professional should have extensive real estate accounting experience and be up to date on all real estate tax laws. Before buying and selling property, consult your accountant to learn how income may affect your capital gains. An experienced property tax accountant can help you decide when to sell a property and when to hold onto it for the maximum tax advantage.

Insurance agent

Finding an experienced agent who has dealt with house flippers and understands the types of insurance you will need is essential. This can include protection against damage from floods and natural disasters, as well as coverage for more than one property at a time. The agent can also advise you on additional coverage related to workers on site while the home is being renovated. Your best bet is an agent who comes recommended by someone on your team. Ask your real estate agent and mortgage broker for references. You can also talk to the agent who has the insurance policy for your vehicle.