Do You Need a Real Estate License to "Flip" Properties?

You buy a property, you flip it, you profit. Does this require a real estate license? In most cases, the answer is "no".

Real estate brokerage is an activity regulated by states on their own terms, thus each state defines which activities require a license. There is a lot of vagueness and ambiguity in some of the state licensing codes, as well as "gray areas", which complicate the matter. Furthermore, if you vary the techniques and your business practices beyond the scope of what I teach in my course, it is not always clear how the state authorities might view your practices. Therefore, this discussion is limited to the simple activity of buying and flipping as follows:

1. Sign a contract with a seller, assign it to a third party


2. Sign a contract with a seller, sign another one with a third party, and then double close

A large majority of states use the "for another" language in their licensing statutes. The "for another" language means the law provides a laundry list of activities that require a license if you do it "for another."