If you flip houses and need your NAICS code, here is your answer right away.
The primary NAICS code for flipping houses is 236118, classified under Residential Remodelers in the Construction sector. However, the correct code for your business depends on whether you are actively managing the renovations or if you are strictly an investor who hires out all the work. This page covers the most common codes for house flippers so you can pick the right one.
| Field | Details |
| NAICS Code | 236118 (Active) / 531390 (Investment) |
| Industry Title | Residential Remodelers |
| Sector | 23 (Construction) |
| Industry Group | 2361 |
| Last Updated | 2022 NAICS Edition (Next NAICS Edition will come in 2027) |
What Does NAICS Code 236118 Cover?
According to the official 2022 NAICS data, code 236118 covers businesses primarily responsible for the remodeling construction (including additions, alterations, reconstruction, maintenance, and repairs) of houses and other residential buildings.
For house flippers, this is the most accurate code if you are “hands-on” or acting as the general contractor. This includes:
- Active Renovations: Gutting kitchens, bathrooms, or entire homes to increase value.
- Structural Alterations: Adding rooms, changing floor plans, or converting garages into living spaces.
- Property Reconstruction: Fixing “distressed” properties that require major repair before they can be sold.
- Project Management: Hiring and overseeing subcontractors like plumbers, painters, and roofers.
The important distinction here is active construction. If your business model relies on physically improving a house to sell it for a profit, the government views you as a residential remodeler.
Does My House Flipping Business Qualify for Code 236118?
Your business qualifies for NAICS code 236118 if:
- You buy homes with the intent to renovate them and sell them quickly.
- Your main source of profit comes from the value added through construction and remodeling.
- You pull permits for structural work on the properties you own.
Your business may not qualify for this code if:
- Passive Investing: You buy and sell properties for a profit without doing any major physical renovations. In this case, use 531390 (Other Activities Related to Real Estate).
- Ground-Up Builds: You tear down old houses or buy vacant land to build brand-new homes, which falls under 236117 (New Housing For-Sale Builders).
- Rentals: You buy houses to fix them up and keep them as long-term rentals, which falls under 531110 (Lessors of Residential Buildings and Dwellings).
When your business sits between these categories, choose the code that reflects the activity that generates the most profit or where you spend the most time.
Where Will You Need This Code?
Your NAICS code is more than just a number; it is a way for banks and insurers to measure your risk. Here is where you will need it:
- Business Insurance: This is vital. Construction insurance is priced differently than real estate investment insurance. Using code 236118 ensures you have the correct liability coverage for active job sites.
- SBA and Construction Loans: If you are applying for a line of credit to fund your next flip, lenders use this code to see if you qualify for small business programs.
- Tax Filings: The IRS requires this code on your tax return. Getting it right helps the government categorize your income correctly.
- Business Bank Accounts: Many banks ask for this code when you open an account for your LLC to ensure your business activities match their internal risk profiles.
236118 in the NAICS Hierarchy
Every NAICS code sits inside a structured hierarchy. Here is exactly where 236118 fits:
| Level | Code | Title |
| Sector | 23 | Construction |
| Subsector | 236 | Construction of Buildings |
| Industry Group | 2361 | Residential Building Construction |
| NAICS Industry | 23611 | Residential Building Construction |
| National Industry | 236118 | Residential Remodelers |
Frequently Asked Questions
What is the difference between code 236118 and 531390?
It comes down to the work being done. Use 236118 if you are actively remodeling the house (acting as the contractor). Use 531390 if you are an investor who “wholesales” houses or buys them and sells them without doing any construction work yourself.
Which code should I use for a new LLC?
If your goal is to buy, fix, and flip, start with 236118. It is easier to explain to a bank or insurer that you are an active remodeler. You can always update this later if your business shifts more toward land development or rentals.
Does code 236118 cover flipping condos or apartments?
Yes. The 2022 NAICS system includes renovations for both single-family homes and multifamily units (like condos) under the 236118 classification.
Do I need a general contractor license to use code 236118?
NAICS codes are for statistical and financial purposes and do not grant you a license. However, if you tell a bank or insurer you are a “Residential Remodeler” (236118), they will likely ask to see your state-issued general contractor license.