The government always has a strange paradox:
- They want you to pay taxes
- They don’t want you making too much money or they will try to make something illegal
If you are reading this article, you may be wondering: “Is flipping houses legal?”
Every weekend, somewhere in the country, someone is going to a real estate seminar where they are teaching people how to flip houses.
It’s true, there is a ton of money in real estate relative to working a day job in 2017…
But is flipping houses legal?
Buying, fixing and selling homes is always legal anywhere in the world, it is a necessary part of real estate. People move into homes, trash them over 25 years and after 25 years someone has to fix the home and sell it retail, so that is never illegal.
Sometimes “flipping houses” is a term used for “assignment of contract” which is “flipping contracts”
Flipping contracts is where someone writes an offer to purchase on a property and then sells the accepted offer to another buyer at a higher price.
Assignment deals are happening everywhere in the world every day because nearly every contract, unless it explicitly states “this contract cannot be assigned” is assignable.
Legal entities are always passing around contracts and assigning from one to another, Walmart does it, all the big companies do it and so assignment of contract will never be illegal.
However, your local municipality or local government may try to stop this process from happening.
The government doesn’t want people taking advantage of the general public and typically frowns on consideration (aka money) being taken for properties that are being sold. So sometimes local governments try to stop assignments from happening.
But where there is a will, there is a way, and if you have a smart lawyer, he or she can find a way for you to assign contracts legally in any market and take consideration.
Flipping of properties and flipping of contracts is one of the oldest ways to make money in the world and will never stop.
Get some professional legal advice and if your lawyer says it can’t be done, fire him and get a smarter lawyer who is more creative.
Respect The Grind,