After Sell Liability?

[Zachary Lovato]

Hey BP! My name is Zach and this is my first time posting anything. I've read through many blogs here and am currently working with a Partner to find and start our first House Flip. We were wondering, after we sell the house, how much liability do we carry at that point? I mean, if the buyer decides they don't like the house or something is wrong, what is the potential liabilities that we would have? Thanks BP!

[Russell Brazil]

There is definitely some liability. Make sure you hold the property in some sort of entity that limits your liability to start. Make sure you do everything legally through the rehab. Then hold back some of profits as a sort of emergency fund for that house in case you need to give the buyer/new owner a few bucks to make a headache go away.  Many of the flippers I know do some work to a house after the new owner has taken possession of it.