Is A Real Estate License Needed?

I'm just starting laying the groundwork to begin real estate investing (with a partner). We met with our CPA today, and he suggested an S corporation as our entity; I've seen other suggestions here, but this seems a decent solution for us.

My question is this: if we buy and sell real estate through the entity, do we need to have a real estate license? Is it similar to selling cars? Most states have a limit to the number you can sell in a year before you need to be licensed.

I know I don't have to be licensed to sell as an individual -- i.e. For Sale by Owner -- but does this change if we're operating as a corporation?

Comments(3)

  • 64Ford16th June, 2004

    No, you don't need a license.

    If you buy and sell for others, without owning either idividually or corporately, then a license is required by most state laws.

  • active_re_investor16th June, 2004

    Entities that are buying and selling a property in which they have an interest as a principle (the corporation owns a stake or the whole thing) are able to buy or sell without any license.

    The RE license is so that you can receive money for brokering a RE transaction between two parties where you have no stake.

    Being a dealer for RE is more about if you are buying and selling vs. investing. It is a tax classification for the IRS. If you are a dealer the property is inventory so the tax rules that provide for lower taxes for investors would not apply.

    John
    [addsig]

  • Wulfster16th June, 2004

    Thanks for the clarification. I feel like it was a dumb question, but while looking through some state entity information, I got worried that we were missing something obvious.

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