The term “remodel houses” derives from the practice of buying an existing property below the market value, remodeling it and then selling it at the market price to obtain a profit. There are many factors to consider when remodeling a home to obtain a benefit, including, but not limited to: resolving liens and taxes due, construction costs, marketing costs and costs of transporting money or land costs. The “transportation” or “holding” costs are the monthly expenses from the moment of your purchase until the sale, such as the mortgage, taxes, insurance, and maintenance. To start a home remodeling business, you must have a well-studied and executed plan.
Determine the operating costs. In a home remodeling business, operating expenses include a vehicle, Internet access, real estate broker commission, construction costs, legal costs to remove the title clouds, which are more often encumbrances against property, advertising and marketing expenses, deposit or custody of money, and unforeseen expenses such as meals and fuel.
Choose a funding source. If you do not have enough cash to buy an immovable property, search financings such as a home equity loan, a mortgage line of credit or a loan for a small business. Information on small business loans can be found on the Small Business Administration website, along with resources regarding the funding request. Most credit institutions require applicants to provide an initial payment and have some guarantee.
Find the service providers. A home remodeling business will need several service providers, such as a painter, construction contractor, architects, lawyers, electrician, plumber, and landscaper. Contact the Better Business Bureau and the local Chamber of Commerce to find qualified and experienced service providers.
Request licenses and permits. In some state or county jurisdictions, a home remodeling business needs to obtain a license as a general contractor, or if the home is sold through a subsidiary, a real estate sale license is required. Check with local and state agencies to determine if licensing or permits are necessary.