BiggerPockets

Is it beneficial to obtain my real estate sales licenses? After obtaining the licenses do I have to work for a company or can I start my own personal real estate firm?
All I'm trying accomplish is being able to list my investment properties on the MLS. Have the ability to purchase HUD homes with out having to pay a realtor to just submit a bid for me. Basically I'm trying to cut my cost on my investments as much as possible. I'm sure someone here understands this and possibility took the same steps earlier in their investing careers. I've been investing in real estate for about 3 years now and realtor fees seem to really eat away from my potential profits. So any advice on this topic would be greatly appreciated.

Minna-
I appreciate your insight. My wife has been kicking around the idea for the past year or so and I keep telling her if that's what she wants to do to go for it. She is only interested in doing it for our own projects as well but I thought it might save some significant money in the long run. What kind of expenses are you talking about that wouldn't make it worthwhile? My homes usually sell for $1M-$1.5M. Would the commisions on sales like that make it more interesting to you? The only thing I didn't like about it is that she would have to disclose " Agent related to Seller" on the MLS but after I thought about that I didn't think that would really scare me off if it was me interested in the house. What are your thoughts about that?

Chad

Tim-
From the little research I have done on the subject it is my understanding that in the state of IL you can get your agents license and the go straight into taking classes to get your brokers license without having to work for 2 years for another broker. Is that how you understand it to be?

I'm in CT so I dont know how different it is where you are, but I pay a few thousand in various fees. Then I have to take continuing ed yearly to keep my license. And you will only save about 1/4 of the commission. After the buyer/seller split theres still the broker/agent split.
Now if youre doing a ton of volume thats a different story. Or if you only buy from the banks alone.
Money isnt the main issue. Disclosure is. Not so much when selling, but when buying. If buying to you means talking directly to sellers or advertising in any way it will impact you negatively.
But now if your wife is the realtor and you're the investor, well then hey you have it made. If youre not a licensed agent you have nothing to disclose to anyone.

Be careful about this. You might save some money and waste more time so do fewer deals.

Or you will pick up one set of costs while reducing others. See the other replies for this.

Either figure out a way to do more profitable deals (maybe by buying properties that are not listed) or spread the costs over more deals. If you want to do more deals then figure out if the license is a plus or a minus.

Most investors do not have a license and an even higher percentage of all agents do not invest. A license is not really all that well connected to investing. Maybe a fine career path but maybe not the best path for your investing activities.

When Minna first discussed getting her license here on BP many of the same issues were raised. She has confirmed that the stuff she was warned about has taken place. Obviously there was a good reason for her to get her license but it was not just to be a better investor. Her frank posts should help make the pluses and minuses clear.

Given the above find 1 or 2 agents you can work with in different markets. That way you can get most of what you want in terms of info. If they are really good they will earn more than they cost as they will help you do better deals.

Maybe you can consider being a referral agent. I'm a licensed agent in NJ but have never actively sold/listed real estate. I'm under contract now for a property I'm buying but I had a full time agent in the office where my license is hanging handle all the details. She will get a commission from the sale and so will I.

As a referral agent, I get a small commission for every client I refer who buys/lists a property with her, including myself. I'm now under contract for a property I'm buying for $225K. After the selling agent/buying agent split, our broker/buying agent split, then my buying agent/referral agent split, I'll end up with about $1300 from this deal, which of course will go towards my closing costs :)

Being a referral agent does not allow me access to the MLS or an electronic lockbox gizmo, but my agent will look up anything I need. I am allowed to go into houses on my own if there is a combo lockbox. My annual fees are about $250. Full time agents here in NJ have at least $2500 in fees a year with their brokerage. My agent had to disclose my license to the seller's agent only - whether the seller shared that info with her client I don't know. If I were listing my house for sale with my agent, it would be in the listing that I had a license.

Thanks REI. For now I don't plan to do full time agent activities, and my agent is also a broker. If it looks like the license might get in the way in the future, I can always reconsider it.

If you can stomach the fees to hold your credential, pay association dues for MLS and other Realtor " perks" ( I use that term loosely), and do the continuing education requirements, I don't see much of a downside. The disclosure that you're an agent shouldn't turn somebody away from buying your home or selling you their home as long as they want to. The biggest plus in my opinion is you can receive commission on properties you buy for yourself (at least in Wisconsin). You do need to include special verbage about an incentive fee if you are a one man show, but if you work under a broker, they can write up the deal and you should receive commission after your split. Plus you get some additional tax write offs.

All great inputs. I'm sure most all REI's have considered and I'd be surprised if this topic hasn't been covered before.
If I can add my two cents:

Consider a broker who charges a flat rate per transaction. I've seen it as low as $400 with a $50/mo fee.

I've found it hard to put a value on the info found on the MLS, including comps, past sales, contacts, etc. when analyzing a property.

Calculate all the fees; Broker, MLS, Associations, whatever. If you close 1
transaction per year you should be able to pay all those expenses.

Save mom 3+%... priceless.

The knowledge you will get, not only in the beginning getting your license, but on every deal is invaluable.

Everyone has a different approach to investing, do your own diligence.