'Million Dollar Listing' Star Josh Flagg -- Cashes In By Selling Playhouse For Celeb Kids

"Million Dollar Listing" star Josh Flagg kept alive the tradition -- of rich kids getting richer -- by unloading his posh Hollywood home to another famous kid.

Flagg tells TMZ ... his now former house, just off the Sunset Strip, has had quite a run of celebrity owners -- and he just sold the quaint 2-bed, 2-bath 1700 sq. ft. home for $2 million.

Checkout the pedigree on the crib: Flagg, grandson of fashion mogul Edith Flagg ... bought it from David Katzenberg -- son of DreamWorks honcho Jeffrey Katzenberg -- for $1.6 mil back in 2013.

And now Josh is handing the keys to Nicolas Pakzad -- son of legendary designer Bijan Pakzad.