Your Farm Area Government and Flipping

One item that is sometimes overlooked while flipping houses is the local government. We always say know your market and that includes the local government, especially if it is out of state. Doing some research on the city’s government before you buy will help you avoid some pitfalls. Most municipalities have an official website. You want to specifically look for information regarding to city planning that may affect future real estate prices. Is the city growing? Are there potential changes to how the city deals with investment property? Let's take a look at a couple items.

Permits

Everyone knows that you need a permit to build. But different states require different licenses and permits for flipping homes. Some states require house-flipping businesses to be licensed as general contractors or if the home is being sold through a subsidiary, require a real estate selling license. In most states however you do not have to have a real estate license to flip a house.

Make sure you apply for the correct permits and double check to see that the local authority providing the permits gives you the correct ones. Towns, counties, and municipalities are increasingly making permit data more accessible. You may be able to find your property’s physical history online, but a trip to the local government administration building can yield results if a web search can’t. Not every community will have this on hand, but it’s nice to get it if you can. Knowing when a permit was actually pulled for a furnace installation, or when a roof was put on will help you with leverage during the negotiation. Discrepancies learned can result in actual dollars saved.

Grants

Did you now some areas actually give out money for flipping houses? Yes it true! So inquire about government grants for flipping houses with state and local governments, not the federal government. Much of the grant money the federal government gives out each year is earmarked before requests are even made for it. On the other hand, states and municipalities within states take a greater interest in granting money to people who want to beautify and better their communities. Do the homework to find out which municipalities or states are setting aside money to redevelop certain areas. The best way to find this out is by calling the community and economic development office of a municipality to find out what programs might be in place that could lead to a grant.

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