profits

Flipping That House in Oregon – Big Profits Or Big Headaches?

Flipping, the real estate investment vehicle in which you purchase a property below value and soon sell it for a profit, is a very good way to generate positive cash flow. Cash flow is important if you want to pay the bills and feed the family. Flipping has become a big business. I encourage my prot?�g?�es to buy and sell for a profit without getting into the rehab business if their goal is to be an investor.
In Oregon you need to be careful how you proceed with a flip. If you buy a house and sell it without doing work on it you will not butt heads with the state construction contractors board (CCB). But be careful. If you think you can buy a house, remodel it, and then sell it, you can – if you have a general contractors license or a developers license. In other words, it’s regulated by the state. The purpose is to offer some semblance of protection to the consumer.
The stated mission of the CCB is:
“The Construction Contractors Board protects the public’s interest relating to improvements to real property. The Board regulates construction contractors and promotes a competitive business environment through education, contractor licensing, dispute resolution, and law enforcement.”
A general contracting license with allow you to do the work yourself on a house you plan to buy, fix up, and sell. A developers license will allow you to buy, hire contractors to do the rehab, and sell.
Who needs to be licensed?
According the CCB:
Oregon law requires anyone who works for compensation in any construction activity involving improvements to real property to be licensed with the Oregon Construction Contractors Board (CCB). This includes roofing, siding, painting, carpentry, concrete, on-site appliance repair, heating and air conditioning, home inspections, tree service, plumbing, electrical, floor covering, manufactured dwelling installations, land development and most other construction and repair services.
A CCB license is also required for:
*those who purchase homes with the intent to fix them up and resell Small House Builder Near Me them, even if they do not perform the work themselves.
*material suppliers that receive compensation for installing or arranging the installation of the materials.
It’s not difficult to meet the requirements for a contractor or developer license. You simply take a short course that costs around $200 and you learn about OSHA, lien laws, and such – there’s very little in it about how to be carpenter, etc. You then take a test which adds an additional $50 to $100. The test is designed, like most state tests, to be passed so the state can collect fees. You can get through it. When I was first licensed all I needed was a bond and liability insurance, which cost about $125 if I remember correctly, and $50 for the state license, and I was a contractor – no course to take and no test.
The hard part of the process now is securing liability insurance you can afford. My insurance broker, …