Is a Business License Required In Order To Flip Houses

9 Replies

I am interested in getting into Flipping Houses and have attended a Real Estate Investment Club in Los Angeles. So far, it has been interesting and I have learned quite a bit. The one subject that has been missing is this: When flipping houses in Los Angeles, I assume that one must have a business license and one must have an IRS tax ID number. I want to know all the legal ramifications BEFORE I actually jump into this. Any suggestion?

If you're buying houses under your name and flipping them under your name then no you don't need a license. If you are looking to buy under a business name then most likely, yes you will need a license. The laws vary by county however.

Thank you both so much. I am thinking of sitting down and picking the brain of a contractor in Los Angeles. I want to get as much information as possible, including how to chose the "Right" Contractor, one who has a substantial list of sub-contractors (and has used them regularly). How do I go about choosing a contractor to discuss this with?

I have already decided on two Hard Money Lenders in my area. I also plan to sit down with them and get as much information as I can.

I am the typical analytical type person. I want to make sure I have a decent idea of what I am getting into before i take the plunge. 

I recently retired and am not the type to sit and do nothing. So, I thought, check into Flipping.

@S L Martinez   good for you!! I think it's wonderful you've decided to flip houses. I don't have any experience to add but if I were you I'd do 2 other things as well. Buy J. Scott's books as a package and dig into both of them, they are both in the BP store. The first one is The Book on Flipping Houses & the second is The Book on Estimating Rehab Costs. You need to find a good Realtor that you "fit with" One that understands your goals and maybe has access to listings before they are actually listed. Your Realtor may also have several contractors to recommend as well. Good Luck!!!


Thank you for your input. I will check into those books. Now I have to figure HOW to find a reputable and successful Realtor. 

One advantage I have, I think, is that I have worked for Facilities Management for a Los Angeles County Department. We have electricians, plumbers, carpenters, etc. Fortunately I have become friends with them while working with them for over six years. I just might have to contact them and see what we can work out.

Again, thank you Christi, your response is appreciated. 

@S L Martinez   Yes, the finding a realtor that understands what we want to do and how the process works for investors vs. home buyers can be exhausting. I am still working on that here in Western NC. Trying to find realtors in other areas of the state that are reputable and have experience with investors seems to be very difficult for whatever reason. haha


Thank you for your input, I do appreciate it. 

I am thinking I might have to do some research on an Investment Realtor versus a garden variety (no insult intended). But I assume an Investment Realtor understands what an investor is looking for versus a Realtor who has expertise in a Buyer/Seller situation where the buyer plans to live in the property and the seller is simply trying to unload property.

Time for me to do some research, huh?

@S L Martinez   Yes, it is a very different type of buying/selling compared to home buyers.  

My dear, sweet mother is a realtor in my area and was my first realtor. We never closed a deal together. We are too alike and butt heads. She is incredibly well-respected in this area as a realtor and has been VERY successful. But, she has no idea how to approach it from the investor's standpoint. SO, I had to fire my mother. Lol.


You were almost responsibility for me chocking to death. I was eating an Egg Roll and when I read you fired your own Mother, I laughed so hard, the Damn Egg Roll didn't know if it wanted to go down or back up. WHEW...

But I now know that I have to look for a Realtor with knowledge of what an Investor wants. My son is a Realtor and though I love him he is not looking at Real Estate from the Investor's point of view.

Thanks again for the info and the bruised esophagus. 

S L Martinez (Lou)