Flipping

[Alberto G. Del Calvo]

Hello! I am a Real Estate Agent from Palm Bay, Florida. I am learning as much as I can to make a move to the investor side. Yesterday I was talking to a friend who wants to do the same and also said that he wants to become a real estate agent so that he can flip houses as well. I asked him what he meant, and he said that he heard from someone in the business who told him that if you don't have a license you are only allow to only flip a house per year. In my 3 months of reading, researching and learning about investments i haven't heard anything like that. So please someone tell me if this is true unless is a Florida law that I am not aware. Thanks!

[Charles Borrelli]

That is a grey area in real estate. By law you can't broker a deal between people without a license. So when you put a house under contract you must "intend" to purchase it. A double close removes all doubt and if you use a trust it covers you double. If you sell the contract you could get into some trouble but likely not since nobody has any way to track it. On the other hand if "John" a Broker or agent goes to "Joe" and puts his house under contract $50,000 then flips the contract for $70,000 the next day to "Steve" the fix and flip guy, and pockets the $20,000 spread. John the broker can get into some major doo doo if the real estate commission catches wind.Because he did not act in "Joe's" best interest since clearly he knew the property was worth a lot more then $50,000. He proved this by flipping it for a higher price the next day. "John the broker" Used his superior knowledge as a professional and took advantage of Joe. And these deals happen all the time.