Licensed Contractor Needed?

[Amy Atkinson]

Hello BP Community!

Getting my feet wet and diving in to learning on all things real estate, and potentially going to start with some fix and flips.

One of my friends said if we buy a home for a flip, we should just buy it under our names, not an LLC, because with an LLC we will need to have a licensed contractor complete the work for the flip.

Is this true?  I can see having someone licensed for things like electrical, plumbing and structural - but not necessarily the rest which is primarily cosmetic?

Is doing it via an LLC the best route? Why or why not? Thank you so much for any insight!

[Jose Jacob]

Appointing a licensed contractor for a fix & flip has nothing to do with your personal name or under LLC. If you buy a property in your personal name and if something goes wrong and someone sue you, you are personally liable and your other personal properties can be affected. If you buy under an LLC, only that LLC asset can be affected in a claim.

If you are planning to do any structural changes, you need a licensed General Contractor. If you are not doing any major changes, and there are only cosmetic work, you can use an unlicensed person (providing that the town has no other provisions). GC usually have licensed electricians and plumbers.  You do not have to get separate people for each job.  All depends on what you do inside the house and your township rules and regulations.