It is a regulatory requirement in most states (I think, from memory, WA is an exception) that all people performing building work are licenced. This is to ensure they have adequate capital, fulfil warranty obligations, know and comply with OH&S and other regulations, and know how to manage contracts legally, in addition to the one aspect that you're referring to, which is quality of work.
The definition of building work includes construction management, i.e. it doesn't matter if you never touch a tool.
In most states, it is simply illegal to coordinate a renovation above a quite low $ limit (based on market value if you paid a licenced person to do it, not what it costs you) e.g. new carpet and paint in one room may be doable; a whole bathroom renovation - let alone a whole house - wouldn't.
I've repeatedly asked those who spruik "renovating for profit" how they get around the extremely prohibitive regulations in this sector, and none of them have ever answered. I take it that means that they all advocate doing it illegally and "hoping for the best".