All of us have watched HGTV shows about people doing property flipping. Is this something you have considered? Here are a few things to think about!
1. You might pay capital gains tax on your flip property. Always involve your accountant (get one if you don't have one now - your Real Estate agent can make recommendations) from the outset. Living in the place for a while might provide some substantial tax advantages, although this is more practical if you are young and single then if you have young kids running around.
2. Looking at distressed properties, that is, vacant or abandoned for a while? Stop by City Hall and talk to the folks in the bylaw department, to ask them about that address. For $80 or so you can get a "Letter of Compliance" that will tell you about any outstanding work orders or other issues with the property. Run over any items you find with your lawyer before starting the process of putting in an offer to buy. Many such properties will have problems you don't want to get into dealing with. For example, severances started but not completed.
3 Ensure that you have enough cash reserves for any fixing up work. Finding good and trustworthy contractors looks easier on TV than it is in real life. In practice, you will need to be present yourself during the fixing up work to ensure you get results rather than excuses, or just unanswered phone calls. Having contractors you can trust to do the work will be a major issue in a flip. Get it all in writing beforehand. Get detailed written plans and drawings, particularly as they relate to the amounts and costs of materials involved. You don't want to pay your crew to sit around while waiting for another Home Depot delivery. Unless you are a professional contractor yourself, don't even think about your flip as a DYI project.
4. If you are going into it with a partner, each of you should have your own lawyer. Also, as Donald Trump is fond of saying, a deal without an Exit Plan is not a deal. When you are going it alone or with a partner, identify when and how you will sell the property, and how the financials will be handled.
House flipping can be a good way to make money, but ensure that you are going into it with the assistance of a Real Estate agent who has worked in this arena.