A Contractor And A Real Estate Agent Can Form A Profitable Duo — Here's How
Posted on: 13 December 2016
If you're a contractor, you might be intrigued with the idea of buying a home, fixing it up, and then reselling it as soon as the work is done. Provided that you buy the right residence and you've done your homework in advance as to what the home will need, you should be able to make a tidy profit with each transaction. A valuable professional to have in your corner is areal estate agent. You and the agent can form a partnership and each of you can play a role in buying and flipping homes. Here's how this situation can work.
Your Agent Finds Suitable Homes
When you're busy working as a contractor, it can be challenging to find time to be constantly perusing the local real estate listings. Here's where your real estate agent partner comes in. By working in the industry, he or she can keep an eye out for homes that will serve as suitable candidates for renovating and flipping. Whenever the agent identifies a home that could suit your plans, he or she will let you know and then arrange a viewing. You'll then have the chance to evaluate what the home needs, how much it might cost, and whether the house is ideal for flipping.
You Split The Down Payment And Mortgage
You can come up with any arrangement with your real estate agent, but a standard approach is to split the down payment and mortgage in a way that suits you both. Keep in mind that you're the one doing the physical work; for this reason, a 50/50 split might not be suitable. One agreement could be that the real estate agent puts down the bulk of the down payment and pays a higher percentage or the mortgage payments in exchange for your sweat equity.
You Do The Work And Then Sell
Once you take possession of the house, it's time for you to get busy doing the necessary repair work. Since this is your profession, this is your responsibility. However, depending on your agent's degree of interest, you might have him or her help on the weekend with basic tasks. Once the work is done, your agent will be able to set a value on the home and list it for sale. When the house sells, you can split the proceeds according to your agreement — and then begin the entire process all over again.
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