Can Realtors Flip Houses Legally?

Question

Hey! I know agents can flip homes. But what are some best practices and disclosures to protect your license?

I am getting into fix and flip now after 8 years in real estate sales. I still have a team and want to make sure I protect that agent sales income stream as I build this additional one.

Looking to hear from agents who also fix and flip. Any advice Is appreciated.

Eliott Elias · Answer

Make the proper disclosures that the buyer and seller is licensed.

Alan Asriants · Answer

You need to properly disclosed that your are licensed. Also as an added measure you need to disclose to the seller that you are knowledgable of the market and that you might be buying under market value

Alex Bekeza · Answer

@Christopher Lynch Many of our best flip clients are also active realtors.

Karen Green · Answer

Christopher, we do not need to limit ourselves, however, we do need to protect ourselves. I have been an Investor and Realtor in Pennsylvania for over 20years. For 10 years I flipped homes with a full time crew on payroll. In my experience, the best thing to do is disclose, disclose, disclose. We are held to a much higher standard than anyone else since we SHOULD know more than the common Buyer/Seller. That said, first we must make sure that we adhere to our state regulations pertaining to disclosures regarding who we are. In other words, we have disclosed two things on all paperwork 1) that we are licensed real estate agents in ______ state and 2) any and all property defects regardless of how big or small. Also make sure you have taken photographs of everything before the buyer takes control of the property in the unfortunate instance that they deem it necessary to take you to court. Always assume the worst and hope for the best! This practice could save you tens of thousands or even hundreds of thousands of dollars. Good Luck!

Nathan Benich · Answer

Yes. All of the advice given here is correct. I would like to add that I recommend to do your fix n flip deals in a separate entity, while at the same time disclosing you're a licensed agent. For example, let's say you want to do a deal at 123 Main St. Use your real estate company (i.e. ACB Realty) to represent your other company to make the purchase as the Buyer (i.e Wins-A-Lot Real Estate Ventures, LLC). Then, pull all building permits and complete all of the construction within the scope of work you laid out in your "Wins-A-Lot Real Estate Ventures, LLC. This creates an official separation of the companies. Then, when you sell it after you receive you "Certificate of Occupancy," the Seller will be "Wins-A-Lot Real Estate Ventures, LLC and ABC Realty will be representing the Seller. Just make sure you have all paperwork, insurance and disclosures in order. I've been doing this for over 12 years and following this example will help mitigate risk and litigation. Cheers from Silicon Valley, CA!:)

Adam Bartomeo · Answer

Disclose, disclose, disclose... I flip several houses a year outside of the rest of my investing. As a licensed real estate agent you are held to a higher standard then the average homeowner. Not only should you disclose that you are licensed but you should also disclose all known defects. Whether or not it is readily observable or not. If things go sideways you will be held to a higher standard by the law. You could also be held to items that you may not have known BUT SHOULD HAVE KNOWN.

Jason Boulay · Answer

Yes, you can flip as an agent, but must disclosure your personal interest as mentioned. In RI, there is the Disclosure of Personal Interest or Family Relationship form that you'd complete/sign and attach in the MLS. In addition, there is also a field when entering the listing called RE License Owned that you'd mark yes when you have any amount of ownership in the property you are listing.

Ray Hage · Answer

Of course but you do need to disclose that you are a realtor when you're purchasing it. In Florida, there is a specific standardized form for this and I imagine in RI, there is a similar one.

Aaron Maggard · Answer

For sure! There is no reason you as a real estate pro should not be investing. Just follow your state's disclosure laws. I'd personally get another team member to list it and run the whole thing. Don't even consider selling it "off market". Believe in your trade and show it.

Doug Smith · Answer

Why not? I don't know RI law, but we've been flipping for more than a decade here in FL. As long as you're treating it the same way you would any sale where you have an interest in the property you should be good to go.

Can Realtors Flip Houses Legally?

Can Realtors Flip Houses Legally?

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