Realtor License to start a LLC?

Question

Hello BP,As I am continuing my journey into REI, I am thinking of starting a LLC in NC(state I live and will be buying/holding/selling property. I was told by a friend who is a current investor and major Real Estate Agent, there is a major possibility that I may need to have a Realtors license to start a Real Estate investment LLC in NC. I have searched the secretary of states website, and did not see any information on this in the QA or state statute. Does anyone have a definitive answer? I do eventually want to get my realty license however not right at this moment. Your thoughts?

Dave G. · Answer

Sorry, couldn't resist....

Levi Bennett · Answer

Also not a lawyer.. but my understanding is that you can buy and sell real property to your hearts content without a license if you use your own money. This includes real estate property contracts, and the assignment (and fees associated with them). However, anytime you begin representing real property on behalf of someone else, including solicitation, you're subject to real estate statutes for the state the property is located in.

Anthony Davis · Answer

Hey Chad!Welcome to the community here!I just saw your post. I am not a lawyer; however, you do not need a realestate license to create and 'run' a realestate investment business.First, decide 'how' you want to invest in realestate. You will not be able to 'earn a commission' without having a realestate license-anywhere in the states. The words that you use will be very important in your investing career, so be mindful of them.Second, decide if you will be 'flipping contracts', or 'flipping houses.'Third, decide on how your 'deals' will be financed. ( When you have the answers to numbers 1-3, you can 'better decide' on a pathway into RealEstate investing.)You mentioned 'flipping houses' in your question-post, so I am assuming that you will want to 'briefly hold ownership' of the properties as you are preparing the investment properties to be flipped. As an active investor, I can tell you that ( if you will be seeking financing outside of your own funds), there are few companies that will offer 'quick', 'stream-lined' funding on a regular basis in your 'own' name. For this reason....in addition to tax benefits.....asset-protection benefits....limited personal liability benefits....and other benefits many investors choose to create some 'form' of business for investing purposes.If you will briefly hold ownership of investment property, while they are being prepared for a 'flip', you will be 'deemed a Rehabber' in the realestate investing world.If you will be 'flipping contracts', you will be 'deemed a Wholesaler' in the RealEstate investing world.Fourth, after you have thought through all of the above, you will need to decide the source(s) of the investment properties that you intend to flip. Then, you need to decide if you want to hire a Virtual Assistant Company to find, negotiate, and contract the properties for you; or, if you will be completing 'each step yourself.' If you hire...you will need to already know exactly what you want, including the investing price ranges for particular house floor-plans and property-amenities. Know that ALL THINGS are negotiable.Believing in yourself is you #1 Asset in RealEstate Investing....and Life itself.As you begin to invest....you will learn the requirements in order to obtain outside financing. You will learn that you can do a lot yourself, and some things are challenging (and should be outsourced.) However, we will never know 'everything', so get started....and learn as-you-go.👊🏼👊🏼👊🏼

Chris Martin · Answer

You do not need a Realtor license to create an LLC in NC, even if the LLC operates a real estate investment centric business. Builders, construction companies, remodelers, investors, etc., do not need to be a Realtor to start an LLC. The NC SOS will reject LLCs using certain words and phrases that my be prohibited by law from using in your business entity name unless you have legal authority. Links to documents and name restrictions can be found here as well as in state statute. "Realtor" is such a word. "Bank", "Banker", "Banking" are such words. And so is "Wholesale", which is regulated by NCGS 75-29 99% of people don't know that using the term "real estate wholesaler" would be considered an unfair trade practice in NC. Also state laws go into effect on 7/1/2017 regarding assumed names. You must use your own name.

Dave G. · Answer

Also not a lawyer, but I play one on TV.

Chris Martin · Answer

Correct. the details are in Chapter 93A of the NC General Statutes, specifically, NCGS 93A-2(c)(7)

Jozy T. · Answer

If you venture into property management (for properties that you don't own) you will need a license. I'm not a lawyer, but this is what I've found so far.

Christopher K. · Answer

Per the NC Real Estate Commission, you do not need to have a real estate license to sell your own properties (or properties you have any legitimate direct ownership interest in). IE- If you are one of the principals (owners) of an LLC or corporation, then you wouldn't need a license to sell properties owned by that company. Obviously this also applies to properties you hold title to in your personal name. You need a license once you start selling, or offering to sell, properties FOR OTHERS (properties you don't have a direct ownership interest in). Disclaimer - This does not constitute legal advice. I'm not an attorney.

Connie Bhimireddy · Answer

I am not a lawyer. And you, of course, should act on any direct advice that's not a lawyers. To the best of my knowledge in NC, I don't think so. (My mom @Beckie Pahner is our Property Manager in NC...) She's taught me that one hour with a RE attorney telling him/her ALL your 1) REI plans (short or long term strategies) and possible plans business like becoming an agent, 2) your fears of what you want to protect against, and 3) your timeline for all this will more than pay for itself!! BUT, Amanda Han's book warns that those entities cost money to maintain(!) and file taxes for even if you make no money in the LLC. So, at the end of the meeting with the lawyer, get your accountant on the line & ask what his/her recommendations will cost. Then, decide :) Good luck!!!

Robert Ombres · Answer

I'm not a lawyer.No, you don't need a license to start an LLC. To receive commission on any real estate transactions, you need a license.