Do you want to start a home exchange business from scratch? Or do you need a sample business plan template from home? If so, I advise you to read on.
The home exchange business also known as real estate business is all about buying property or real estate at a cheaper price, doing some necessary renovations, and selling at a higher price for profits. A home exchange business is a business that can make you a millionaire in a few years if done in the right way. This is because real estate or property values always appreciate, unless there is a massive downturn in the economy.
You can start a home exchange business and turn it into a multi-million dollar business by working smart. Many self-made millionaires we know today made money from home investing or the real estate business. To successfully run a home exchange business, you must connect with many real estate brokerage firms.
Real estate brokerage firms help you find good properties for sale and also help connect you with buyers when you put your property on the market.
The home exchange business is very capital intensive, even on a small scale. You have to buy the house, do some massive house renovations, and sell it later for a higher price. The buying and renovating process requires a good capital investment to achieve this before you can change the house for a profit.
Let’s quickly consider some steps to take to successfully start your own home exchange business:
How to Start a Home Change Business – Sample Business Plan Template
1. Business plan
The step in starting any successful business venture is to come up with a home move business plan. The business plan is a roadmap that turns your ideas into reality. For this home change business, your business plan should answer the following questions; How many properties do I want to buy?
What is the estimated capital that I will need to start my home exchange business? Will the house be rented to start with or will I sell the property properly after the renovation process? How do I intend to increase the capital that I will invest in this business? The correct answer to these questions will form the basis of your business plan.
2. Source of capital
It was mentioned earlier that a home investment business is capital intensive, which means that you may have to take out a loan to finance the business. Some ideal places to obtain loans to start a home exchange business are; a bank, where you can be provided with a loan to start your business, but you may need to provide them with details of your business plan.
The loan can be rejected at the discretion of the bank. You can also get capital from the SBA, but on the condition that you provide them with collateral and also a loan advance. You can also look for financial opportunities like home equity loans.
3. Apply for a business license
You must obtain a business license in order to legally operate your business in a location of your choice. Also, you may need to obtain a real estate sales license to obtain permission to operate your home exchange business – remember to operate your IRS TIN from the Internal Revenue Service for proper tax payment calculation.
4. Buy properties
The idea here is to buy a property at the lowest possible price to allow you to make a profit when you flip the house. You can use the services of a real estate broker to obtain properties that are for sale, but you may have to pay a costly commission fee for each successful transaction you make.
I prefer to use the services of a real estate agent when selling a property other than to buy. Another option you have is to view the local properties that are for sale; sites like reatlytrac and zillow are some sites that show local properties that are for sale.
For renewal, you must contract the services of the following service providers; Construction company, painter, electrician, plumber, air conditioning and architect. Each of the service providers will handle one aspect of the renovation work according to their areas of expertise. Just be sure to bargain for the best deals.
6. Source for buyers
After you have renovated the property, it is time to put it up for sale. One thing with real estate is that most of the time, it takes months or even years to find a good buyer who will buy the property at the price you want to sell. As long as you are not in a rush to sell the property, you can make big profits on the sales if have enough patience.
Finally, before paying for the purchase, you should consider the cost of the renovation . You should estimate how much it may cost to renovate the home before you sell it. And you should get the estimate of the market value of the house after the renovation. A real estate agent can help you with such an estimate. This is to ensure that after subtracting the purchase price and the amount you will spend for the renewal, there will still be enough profit.