limit to number of houses that can be sold

[Sean Elliott]

I am normally a buy a hold investor,but recently I have started expanding my skills into house flipping. My plan was to flip and sell 4 homes in 2017 spring/summer season. But I heard that since I am not licensed realtor I can't sell more than 3 homes a year. If I do I face some type of govt penalty tax or law consequences. How true is this or is it complete BS? How do flippers get around this if it's true? Is this just in Indiana?

[Lawson Ott]

the dodd-frank act is likely the law you are referring to.

in a nutshell: no one entity may finance more than 3 transactions per year without complying. basically, you can offer seller financing, land contract, etc up to 3 times per selling entity. so you can do 3, your llc can do 3, your other llc can do 3. - but compliance is just properly screening to make sure that the buyer can afford it. you'd have to prove that you did an almost-bank-level credit worthiness and financials check before approving a buyer.

just a summary from a non-lawyer, for more info, please defer to a competent attorney in your space.