Do You Need a Real Estate License to Flip Houses in 2024?

We’ll start by asking: Do you need a real estate license to flip houses in 2024?

Is that ⬆️ question stopping you from jumping into your first investment property?

Well, not anymore!

Get all of your questions about whether you need a real estate license to flip houses answered right here.

Let’s hop to it!

The Big Question: Do I Need a Real Estate License to Flip Houses?

Freedom is what makes flipping houses for profit so attractive to many first-time real estate investors.

But, you may be wondering whether you’re qualified to start buying and selling properties if you don’t have a real estate license.

So, do you need a real estate license to flip houses?

Get the answers before you start hunting for your first flip property…

The Basics: Do You Need a Real Estate License to Flip Houses?

Nope! (3 cheers!)

You don’t need a real estate license to flip houses. But, the deeper answer is more nuanced than that.

So let’s dive deeper…

Do you need a real estate license to flip houses if you want to flip a large number of homes each year?

Well, it actually doesn’t matter what kind of volume you do. No license is needed to simply buy and sell homes for profit.

Do you need a real estate license to flip houses in any state?

No states actually require a real estate license to engage in this activity.

Do you need a real estate license to flip houses if you want to sell a home without help from an agent?

You still don’t need a real estate license to flip houses, even if you want to sell the home on your own. (Which, many investors do; no agent involvement.) The same rules apply to any homeowner who simply wants to use for-sale-by-owner status to list a house.

Do you need a real estate license to flip houses if you make a certain amount of money?

Your status as an unlicensed investor doesn’t change just because you hit a certain income level.

Do you need a real estate license to flip houses if you are getting financing through a bank?

Still no, lenders don’t require homebuyers to be licensed real estate agents just because they are purchasing investment properties.

Do you need a real estate license to flip houses if you are using crowdsourcing?

Generally, investors on crowdsourcing platforms are simply looking for hardworking and knowledgeable people to handle the in-person aspects of flipping an investment property. But, some investors may be more likely to fund your idea if you have licensing because it shows dedication and expertise.

I do want to point out that you might be confused about the answer to “do you need a real estate license to flip houses?” simply because so many people who make money flipping homes do have real estate licenses.

The reason why is that there are many perks to getting licensed.

When it comes to questions about whether you need a real estate license to flip houses across the country… it’s really more about it being beneficial even, though it’s not a requirement.

So, here’s a look at even more helpful info about having a real estate license to flip houses versus going unlicensed…

Benefits of Having a Real Estate License to Flip Houses

An investor with a real estate license makes you an “insider” in the property market. Here’s a look at the pros of getting a license:

Access to the Multiple Listing Service (MLS): Almost all properties sold in the United States are found through the MLS. As a licensed real estate agent, you’ll have the opportunity to browse MLS listings in private databases without paying an agent. Additionally, you’ll be able to list your own properties for free on the MLS.
Credibility: When other agents know that buyers are looking for fixed-up homes, they will be more likely to refer clients to you if they know that you are a licensed professional.
No Need to Pay Commissions: As a house flipper, you’re routinely buying and selling homes in short periods of time. That means you’re on the hook for agent commissions from both the buyer and seller on the same property. When you’re your own agent with a real estate license, you can save thousands of dollars in commissions on a property from start to finish. While the average commission rate for real estate agents is 5.46%, it can be as high as 10%.
Legal Knowledge: Obtaining your real estate license will make you an expert on real estate law. In addition to helping you avoid being scammed by buyers, this legal knowledge can help you avoid accidentally breaking the law.
Better Negotiating Power: When you list a property on the market, most buyers will complete transactions through their agents. You may feel that you’re at a disadvantage if you don’t want to pay agent fees every time you flip a house. However, the agent on the other end of the deal may treat you with more respect simply because you are also licensed.
Options for Career Pivots: Flippers who find that they are good at their jobs may decide to also work as part-time real estate agents to make extra money. This is one industry where experience alone just doesn’t cut it. While all of the connections and experience you gain as a flipper can set you up for success as an agent, you cannot perform duties as a real estate agent unless you are properly licensed.
Networking: Operating as a licensed real estate agent gives you access to an extended network of professionals that includes investors, buyers, contractors, inspectors, lawyers, and other agents.

Any Drawbacks to Using a Real Estate License to Flip Houses?

Do you need a real estate license to flip houses?

Like I’ve said: nope.

That’s why some view obtaining your license as an unnecessary investment, if your sole goal is to begin flipping homes as quickly as possible.

It typically takes around six months of intensive preparation to become a licensed real estate agent. In most states, agents must complete 60 to 180 hours of pre-licensing education.

How to Get Your Real Estate License to Flip Houses

If you’re interested in getting your real estate license to flip houses, it includes:

Completing pre-licensing coursework.
Getting sponsorship from a brokerage.
Taking the licensing exam.
Completing background checks and fingerprinting.

Here’s how to do it step by step.

Step 1: Complete Your Education

Each state will require you to complete a specific number of course hours before you can get your license. Requirements range anywhere from 60 to 180 hours, which can be a lot of time!

Make sure to take classes with a state-accredited provider.

Keep in mind that both in-person and online options are available.

Step 2: Sign Up For Your Test

Once you’ve completed the course, you will need to sign up for the real estate license exam.

Exams are held throughout the year and usually require a registration fee.

Step 3: Pass The Exam

Now it’s time to pass the exam, which takes anywhere from 90 minutes to three hours to complete!

The exam will cover key concepts you learned in your real estate education courses.

Step 4: Apply for Your License

Once you’ve passed the exam, you can apply for your real estate license.

You’ll need to submit proof of course completion and your exam results.

You’ll also need to pay licensing fees, complete a background check and submit fingerprints.

After that, congratulations — you’re a licensed real estate agent!

What Do You Actually Need to Start Flipping Houses?

We’ve clearly established that you DON’T need a real estate license to flip houses.

But, you may be wondering what is needed if you forgo a real estate license.

The simple answer is that you need a plan…

So, here’s a quick blueprint for how to get started with your first income-generating property now that you know that the answer to whether you need a real estate license to flip houses is no.

Set a Budget: This requires you to research the market to be able to identify a good deal that will sell for market value after being fixed up.
Rely on Experts: While you may eventually be able to handle 99% of each deal on your own in the future, it’s recommended that you use a real estate agent, inspector, insurance agent, and any other experts needed to help you make an informed choice.
Secure Financing: Use a traditional lender, private lender, crowdfunded platform, home equity line of credit, or your preferred source.
Find a Property: Flippers generally look for undervalued or distressed properties that could be sold for the same price as “comps” in the same neighborhood after undergoing renovations. Do you need a real estate license to flip houses if you’re approaching homeowners with offers on homes that aren’t already on the market? No license is needed to make direct and unsolicited offers as either an individual buyer or wholesaler.
Get an Offer Accepted: Create an offer that gets you a nice profit, but still leaves room for your end-buyer to profit, while keeping in mind any needed repairs.
Renovate the Property: If you choose to reno the property, rather than assign your contract to an end-buyer, the goal is to do that in just 3 to 6 months without cutting corners.
Sell the Home for Profit: Either sell your contract to an end-buyer or list the renovated property with an agent’s help or on a for-sale-by-owner basis. Do you need a real estate license to flip houses if you want to get the home listed on MLS? If you’re going to remain unlicensed, you will simply need to pay a licensed agent to list the home on MLS for you.

Here’s where I think some confusion comes in about licensing…

As an investor, when you have a property under contract, you’re going to market the contract NOT the property. If you were to market the property and you don’t have a license, that’s brokering and it is illegal.

So, make sure you are marketing the CONTRACT not the PROPERTY when looking for end-buyers.

Only a licensed real estate agent can broker deals; you as an investor can advertise the contract.

Of course, if you’re a licensed investor, you can do both. 🙂

Final Verdict on Whether to Have a Real Estate License to Flip Houses in 2024

Ok party people, for the last time…

Do you need a real estate license to flip houses?

No!

No special licenses or certifications are needed to begin flipping houses!

But, successful house flippers essentially need to have the knowledge and mindset of a professional real estate agent.

For some, going through the process of obtaining licensing is worth it. For others, self-education is a free way to gain the knowledge needed to start investing in fixer-upper properties with confidence.

Now that you’ve plenty of info about whether to be licensed or not… it’s up to you to decide.

Happy investing!