NEW: BP Podcast 66: Flips, Apartments, & Protecting Yourself From Professional Tenants with Michael Blank

Hide this

From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1515 topics, 14401 posts — Last Post 04/19/14, 04:46AM

BiggerPockets Exclusive PRO Area

117 topics, 839 posts — Last Post 04/18/14, 05:47AM

New Member Introductions

10886 topics, 85617 posts — Last Post 04/19/14, 04:56AM

Real Estate Success Stories

396 topics, 6154 posts — Last Post 04/19/14, 04:10AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5935 topics, 46774 posts — Last Post 04/18/14, 11:05PM

Renters

643 topics, 5815 posts — Last Post 04/19/14, 03:38AM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/16/14, 03:58AM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

654 topics, 6264 posts — Last Post 04/19/14, 01:54AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3674 topics, 29452 posts — Last Post 04/19/14, 04:13AM

Real Estate Guru, Book & Course Reviews and Discussions

1133 topics, 11558 posts — Last Post 04/18/14, 11:03PM

Ask About A Real Estate Company

740 topics, 7318 posts — Last Post 04/18/14, 11:52AM

Real Estate Investing

Real Estate Strategies

Wholesaling

5603 topics, 43740 posts — Last Post 04/19/14, 04:24AM

Rehabbing and House Flipping

3333 topics, 30990 posts — Last Post 04/19/14, 04:50AM

Real Estate Development & New Home Construction

553 topics, 4683 posts — Last Post 04/18/14, 10:25PM

Innovative Strategies

703 topics, 6027 posts — Last Post 04/18/14, 08:48AM

Tax Liens, Notes, Paper, & Cash Flows Discussion

866 topics, 6677 posts — Last Post 04/18/14, 11:42PM

Rent to Own a.k.a. Lease Purchase, Lease Options

691 topics, 4871 posts — Last Post 04/18/14, 03:32PM

1031 Exchanges

143 topics, 1054 posts — Last Post 04/18/14, 08:41AM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1686 topics, 11285 posts — Last Post 04/18/14, 01:32PM

HUD, VA, and Tax Sales

414 topics, 3089 posts — Last Post 04/18/14, 12:05PM

REOs

1214 topics, 10570 posts — Last Post 04/17/14, 02:28PM

Short Sales

1534 topics, 13120 posts — Last Post 04/17/14, 04:44PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7201 topics, 70739 posts — Last Post 04/19/14, 04:55AM

Mobile Homes & Mobile Home Park Investing

638 topics, 5140 posts — Last Post 04/18/14, 03:22PM

Investor Basics

Starting Out

7699 topics, 60435 posts — Last Post 04/19/14, 03:35AM

Investor Psychology

431 topics, 6104 posts — Last Post 04/18/14, 06:08PM

General Real Estate Investing

4716 topics, 37183 posts — Last Post 04/19/14, 02:53AM

Real Estate Investor Marketing

1731 topics, 14093 posts — Last Post 04/18/14, 11:12PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1410 topics, 8985 posts — Last Post 04/18/14, 10:17PM

Multi-Family and Apartment Investing

1109 topics, 9224 posts — Last Post 04/19/14, 03:50AM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

639 topics, 4885 posts — Last Post 04/18/14, 02:57PM

Business Basics

Goals, Business Plans & Entities

831 topics, 7562 posts — Last Post 04/18/14, 04:25PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2785 topics, 20003 posts — Last Post 04/19/14, 03:34AM

Property Insurance

309 topics, 2045 posts — Last Post 04/17/14, 07:41PM

Personal Finance Discussion

328 topics, 2731 posts — Last Post 04/18/14, 04:33PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2832 topics, 19695 posts — Last Post 04/19/14, 02:40AM

Creative Real Estate Financing

1209 topics, 8768 posts — Last Post 04/18/14, 08:34PM

Crowdfunding Real Estate

35 topics, 461 posts — Last Post 04/18/14, 05:17PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1209 topics, 7988 posts — Last Post 04/18/14, 11:30PM

Bankers, Lenders, and Mortgage Brokers

441 topics, 1922 posts — Last Post 04/18/14, 09:39AM

Contractors

268 topics, 1678 posts — Last Post 04/19/14, 03:38AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1988 topics, 11603 posts — Last Post 04/18/14, 10:42PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

64 topics, 428 posts — Last Post 04/18/14, 04:22AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15015 topics, 53950 posts — Last Post 04/18/14, 09:07PM

Real Estate Events and Happenings

164 topics, 2505 posts — Last Post 04/19/14, 12:04AM

Off-Topic

Off Topic

Off-Topic

2905 topics, 32408 posts — Last Post 04/18/14, 05:31PM

Housing News & Real Estate Market

914 topics, 8351 posts — Last Post 04/17/14, 08:41AM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Starting Out » Real Estate License

Real Estate License

23 posts by 14 users

Signup

Real Estate Investor · Illinois


Hello,

I am looking into getting my real estate license, but I heard through the grapevine that all realtors are required to become brokers now, that you just can't get your real estate license to be just a realtor? Does that make sense and does anyone know if this is true? Thanks alot.



Real Estate Investor · Springfield, Missouri


Hi Jamie, just caught me going out the door so to speak, going to the cabin! Where have you been, thought you'd be out of school and owning shopping centers by now! LOL

I don't think your grapevine is working very well, stick to BP! An agent works for or under a broker. You can be a broker and work all alone, by yourself.

For an agent or a broker to be in the multiple listing service, they will be required to become a Realtor. A Realtor is a member of the National Association of Realtors and they agree to a code of ethics and standarized transaction requirements and use similar form contracts.

You can be a broker or an agent working under a broker and you are not required to be a Realtor. Usually, you'll find non-Realtors that have a license working in commercial properties, where the MLS is not such a big deal, or in property management.

Hope that clears it up for you and have a great and safe 4th of July! Later, Bill


Financexaminer@real estate investor dot com


Mobile Home Investor · Spanaway, Washington


My suggestion would be to skip the license part and get some in-depth schooling on real estate investing. Realtors are not doing so well right now so another newbie in the field would not really help matters any unless you have a sphere of influence of 5000 close friends to use as buyers and sellers to do business with you.



Wholesaler · Memphis, Tennessee


I have been a full time wholesale investor for the last 3yrs and in the last few months decided to get my RE license. It is nice as an investor to have this b/c it gives you more opportunity to do things and offers more ways to make money. Some say its a waste of time but that is also the same person who needs a RE agent to get them codes, look up homes on the MLS for them, make offers for them, etc...
Its up to you, personally I think its a good thing.


Small_buymemphisnow_stacksCurt Davis, Buy Memphis Now
E-Mail: [email protected]
Telephone: 901-207-8977
Website: http://www.BuyMemphisNow.com
KAIZEN Realty 901-221-4041


Real Estate Investor · Kalamazoo, Michigan


I agree with Curt. As an investor, having a license can give you an edge when talking to lenders, title companies, other realtors, etc. Also good to be able to make a referral to an agent in another area. Since we work nationwide, I find it very useful.



Real Estate Investor · Illinois


Thank you for the replies. Nice to hear from you Bill, I am getting to that point eventually. It's funny that you said that about realtors and struggling. The only reason I asked this is because my realtor (a family friend) I have now that sends me listings had told me what I had asked in my original post. I was talking to him about obtaining my real estate license just to be able to due my due diligence, be able to get into houses when needed, etc., but when I was talking to him about taking the courses just to get my realtos license to use the MLS he said I can't just do that anymore they are making it mandatory that you become a broker as well?? I thought that didnt make sense, but I just wanted to see what others thought. My main reason for obtaining the license would be again to research market areas, search listings, etc. Thanks again for the replies.



Real Estate Investor · Springfield, Missouri


Hi, that's a great deal of trouble and expense to go to just to peek in the MLS. If that's really all you want, spend some time with the family Realtor and peek in the MLS listings. You can take notes, view properties alone if you like (from the outside) and work a deal on the commission if you want to buy.

OTH, having a brokers lic. can be a big plus, but you'll need to really be buying properties for it to pay off IMO. I think you will be required to have an office, a phone number, bond and insurance...so if all you'tre going to do is look in the MLS, well, just not worth it.....but if you want to be active, like Curt, work both sides of the street, then go fo it.

BTW, your friend may have been speaking of his/her office, some agencies are made up of only brokers, here we have one named "House of Brokers" so no agents are admitted.

I have heard too, that some states may be going to one test and you may choose to be a broker/agent, just phasing out the agent license, maybe that's what your friend was talking about, but that rumor has been around a long time....be safe and enjoy the weekend! Gotta go get the boat ready! Later, Bill


Financexaminer@real estate investor dot com


Mobile Home Investor · Spanaway, Washington


While I had a license our state went through the changeover also. All agents are required to pass the brokers exam and are issued a brokers license. They then work for a managing broker for a period of 2 years before being able to open their own office. After I had my license - we got interested in commercial so access to the MLS was just an additional expense. Paying fees to the political fund to elect crooked politicians who sell their votes to the NAR lobbyists and then the way many conduct business drove me to turn it in! I no longer wanted the stigma associated with the term "realtor".



Multi-family Investor · San Jose, California


Originally posted by Realtyman:
While I had a license our state went through the changeover also. All agents are required to pass the brokers exam and are issued a brokers license. They then work for a managing broker for a period of 2 years before being able to open their own office. After I had my license - we got interested in commercial so access to the MLS was just an additional expense. Paying fees to the political fund to elect crooked politicians who sell their votes to the NAR lobbyists and then the way many conduct business drove me to turn it in! I no longer wanted the stigma associated with the term "realtor".


NOW I understand why you're so against getting a RE license. I think I'm going to buy deals on wheels instead of getting my salespersons license...it's just that working a PT job for $15 an hour does NOT really give me enough cash to start working on RE deals yet Realtyman. I know in the military you said you were earning enough to put 40-50% aside in savings for your first residential deals. Well that makes sense.

I'm trying to figure out how I can earn money while in college so I can go in and start getting cash flow myself. Thoughts?

***Sorry for the triple post***



Real Estate Investor · Ellicott City, Maryland


Originally posted by Realtyman:
My suggestion would be to skip the license part and get some in-depth schooling on real estate investing. Realtors are not doing so well right now so another newbie in the field would not really help matters any unless you have a sphere of influence of 5000 close friends to use as buyers and sellers to do business with you.


Just as another perspective, my business earned/saved over $40K in additional profit last year because one of our employees (my wife) has her real estate license.

In addition to the extra profit, we also had much more control over every aspect of our deals...

While maybe not for everyone, to make a blanket statement that people shouldn't get their license seems a little one-sided...


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Real Estate Investor · Tuscaloosa, Alabama


There are a couple of considerations here, not the least of which is expense.This will vary according to your state and even your county, since Boards of Realtors are organized by county. In addition to the cost to obtain your license, you will have to pay the local board membership dues and MLS dues which may be separate charges and may be billed monthly.Many franchise companies will charge you a monthly rent in return for a commission split more in your favor. Your Realtor friend should be able to give you an estimate of the monthly cost in your county.
Another consideration is the fact that you will not be able to work independently for at least a year, depending on the law in your state. Whether your state law requires work as an agent under a broker as a sort of an apprenticeship, or whether you can be a broker from the outset and work under a supervising broker, you will have to abide by some one else's ground rules until you can establish independence. Even though you will be an independent contractor, the supervising or managing broker is responsible for your actions. He will probably want to know what you are doing and will certainly give you some feed back. He may or may not be helpful.
Don't forget he will be looking to you to do some sales. He gets a piece of your activity.


Ralph Taylor,
Telephone: 205-750-4041
Website: http://www.WarriorBargainHouses.com
www.RalphBuysHouses.net


Real Estate Investor · Portage, Michigan


Jamie,
Jason has a good point. Besides the $$$, control and being in the "inside loop" can be a great benefit. Also, the networking aspect can be of benefit. Realtors flock to anything with free food (and drinks). That's a good time to introduce your self and let them know what you are doing and how they may be able to work with you. There is always some outing or 5:01 party going on.

Not sure about Illinois, but in Michigan you can just get a salesperson license and work under a broker.
Bill



Real Estate Investor · Illinois


Interesting, thanks for all the replies. I am going to look into what the state specific laws are for Illinois and see if it's even worth it to me. Thanks again.



Commercial Real Estate Broker · Canton, Georgia


Yes license requirements vary by state.In my state of Georgia you start out as an agent and then have to hold an ACTIVE ongoing license for a period of 3 years before you can get your brokers license.

You can take the test for brokers requirements at 2 years but have to wait 3 for the license.Our mls's do not require a REALTOR membership.

Where people get confused is some states mls's are owned by NAR and they dictate membership for access. Your local state real estate commission cares nothing about the NAR and just if you have committed a license law violation or not.

NAR is subscribing to a code of ethics and that is all and paying to belong at the county,state,and national level.

Another item to consider is if you are an investor only you are given more leeway on what you get away with in contracts.If you are trained in contracts and licensed there are some tactics you cannot do like an unlicensed investor could.

On the residential side I could see you getting licensed to access properties,etc.

On the commercial real estate side you are paying for expertise and contacts not access.


Small_allworldrealtyJoel Owens, All World Realty
E-Mail: [email protected]
Telephone: 678-779-2798
Website: http://www.AWcommercial.com
www.AWcommercial.com 678-779-2798 [email protected]


Real Estate Investor · Chattanooga, Tennessee


We buy a lot of our properties from REO agents. I've always been hesitant to get my license because they might see me as competition rather than a buyer.



Real Estate Investor · Ellicott City, Maryland


Originally posted by Edwin Brown:
We buy a lot of our properties from REO agents. I've always been hesitant to get my license because they might see me as competition rather than a buyer.


Not sure why you say that?

In my experience, REO agents love that fact that we have a licensed agent on our team. Basically, what I tell the REO agent is:

- We will let ourselves into the property (we have an agent key) to view it

- We will write up the contracts and make all counter-offer decisions quickly (don't need to go through another agent)

- We will let ourselves in the property during due diligence

- We will manage the closing process

- We will pick up the selling agent's check at closing and drop it off to him/her at their office

Basically, all the selling agent does is submit to the bank the contact we send her, and then once it's accepted and the addenda are signed, all she does is sit back and wait for us to drop off her commission check.

Oh, and we always drop off part of OUR commission check as well...as an added little bonus...

If you were an REO selling agent, would you want to work with us? :wink:


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Developer · Rochester, New York


Originally posted by J Scott:

Oh, and we always drop off part of OUR commission check as well...as an added little bonus...

If you were an REO selling agent, would you want to work with us? :wink:


Why yes I would :lol: Out of curiosity, how much of your butter do you spread on their bread?

Thanks,
Mark


Small_leavesMark Updegraff, Updegraff Development LLC
E-Mail: [email protected]
Telephone: (585) 666-3069
Website: http://www.UpdegraffDevelopment.com
http://UpdegraffDevelopment.com Real Estate Investment & Property Management, Rochester NY


Real Estate Investor · Ellicott City, Maryland


Originally posted by Mark Claire:
Originally posted by J Scott:

Oh, and we always drop off part of OUR commission check as well...as an added little bonus...


Out of curiosity, how much of your butter do you spread on their bread?


We generally purchase houses in the $40-80K range, and for REOs we typically receive about 2.5% commission; so our typical commission is on the order of $1500.

If we've never worked with the selling agent before, we'll generally give her $500 (assuming a smooth transaction). For agents we've worked with before, we'll give $750. And if the agent has "helped us out" to either find a deal or get a contract accepted with the bank, we may give the whole thing.

Also, many times there is a $1-2K bonus for purchasing REOs, and we'll always give the selling agent 50% of our bonus.


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Residential Real Estate Agent · Newark, California


I like J's answer on all the topics in this site, very practical and real!! I'm also a real estate agent in CA and getting more education in investing. My question is little bit out of this topic, I was wondering when your wife gets commission from her broker, does she adds that to your company's income so that you can save on taxes. I just wanted to see what's the best way to save taxes on my commission and investing income.



Real Estate Investor · Ellicott City, Maryland


Blaison -

From a tax perspective, it really doesn't matter how the income is accounted for -- whether it be taken by the same company doing the investments or a separate entity set up just to get commissions. The reason for this is that the optimal entity for both these income streams is likely to be same for any given investor.

In my case, using s-corps (actually LLCs taxed as s-corps) is the optimal entity for both my flipping business and collecting real estate commissions. At the end of the year, it doesn't matter from a tax perspective whether I earned all that income in one LLC, two LLCs or a dozen LLCs -- the tax burden is the same.

That said, more complicated business structures may see a difference, but that is going to depend on your specific circumstances. Also, there are asset protection and accounting advantages to using separate business entities as well.

Personally, I spent a couple years receiving all the income through a single business entity, but now have a separate business that I use for real estate agent related income and expenses.

But at the end of the year, I pay the same amount of tax either way.


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook




Sign up