BiggerPockets

This is a question I hadn't considered until a couple days ago, but here is why I ask it. I'm new to investing and want to start making money, and I'm also committed to learning everything I can about whatever I get serious about. So as a result, I decided to go to real estate school and get my license, which I'm scheduled to do next month. I figured, the knowledge will benefit me, I'll gain access to MLS, save commission if I want to buy a property, etc....But then I attended a REIA meeting the other day, and the speaker was a lady who was a short sale specialist. After the meeting, I was chatting with her and mentioned my plan to get my RE license, and she immediately said, "that is not necessary, and when it comes to short sales at least, it could even be a detriment, in that a licensed agent has to make all sorts of disclosures that a non-licensed person does not have to make". I didn't press for details, but it got me thinking. If I want to spend most of my efforts on the investing side of the business, am I actually hurting myself by getting a real estate license? I would like any licensed agents/brokers who are also experienced investors to weigh in on this issue please. What are the pros/cons of being BOTH a licensed agent/broker AND an active investor....regarding shortsales, wholesaling, rehabbing, or whatever topic you would like to relate it to. Thanks for the input.

Having been a Broker in CA and CO many years ago, I'd say do all the study but DON't get the license. The knowledge is what you want and need to help you succeed.
I agree with the second part of the previous post in the don't ask and don't tell with the banks because of more hoops to be concerned with. However I disagree with the first part of the previous post for the same reason.
If you want to negotiate with a FSBO seller and are a realtor, you better have the seller sign something like the following;
" I, the FSBO seller am not very aware of what I am doing and may be selling my property at a RIDICULOUSLY low price to someone who understands the market much better than I, is a professional, and may be stealing my property as to value in comparison to price being paid. I, the FSBO seller am OK with that and make this transaction with that knowledge."
Have that statement signed and you MAY not suffer any repercussions, lawsuits and errors and omissions controversy from it.
Without an agreement of this type, you may have an ethics problem develop due to inadaquate disclosure of your knowledge and intent. Lawyers feast on that kind of stuff, Rich.

Without taking away from others comments here which I find note worthy. As an Investor first, I chose to get my license for one very important reason. That reason seems to be the thorn in most Investors sides. Finding a competent Realtor who knows what Investors want and need. As a Realtor-Exclusive Buyers Agent/Financial Advisor, gives me free access to info, data, stats, title profiles, seller mortgage info, nationwide MLS access, etc, etc, etc, I have access to this info for my own investing and I offer the same to my Investor clients. A turnkey network of services, which also includes free access to my property & tax analysis software. + mentorship under one roof. Priceless, for those Investors who can appreciate what I have to offer. Two more things! Under what might become a new property seller law. Realtors are exempt! Having a license also gives you the freedom to clam Real Estate Professional Status on your tax return.
Study hard, get your license! The negatives in my opinion will never out weigh the positives. Short Sales are a waste of time anyway!!!!

Matt Mathews
Mathews Associates
Real Estate Investment Services
Exclusive Buyer Agent/Financial Advisor. Certified Energy Star Preferred Agent.

Hi Matt,
I can only say Amen after your clear info. But I do have a question though ;How can you get access to national mls intead of the state you have your license from ?I have mls access just for the state i live in .

I still don't buy the need to be an agent. I have MANY realtors that will share their entry code for all the info they have. Anyone can find out every single listed property any where in the U.S. by just going to realtor.com and enter the city and particulars you want.

Temi- That is smart having a partner that doesn't have a license. Best of both worlds, imo.

Matt- it is not easy to find a competent realtor. They say 10% make 90% of the money and the other 90% of realtors share the 10%. I look for the high wage earners. Normally, they have earned a reputation for their work ethics, knowledge and experience. Not in all cases, but in most.

Originally posted by Matt Mathews

As a Realtor-Exclusive Buyers Agent/Financial Advisor, gives me free access to info, data, stats, title profiles, seller mortgage info, nationwide MLS access, etc, etc, etc,

What? You mean you don't pay a fee for your license, you don't pay an anual fee for your MLS access, etc., etc.? I believe (and agree with Rich) that having a RE sales license as an investor has it's limitations.
This HAS been discussd in previous threads, in fact, I posted this very same thing and one response claimed to have heard the negatives but nobody ever could lay them out for him, so I did. Rich's example of dealing with FSBO's is just one of several potential hinderences having your license. The obvious benefit is access to MLS and most important, commissions.
I get free access to title reports and the MLS through my team mebers and it is actually FREE (I don't pay a dime, but I certainly repay them with my business).

That all said, one of the BEST strategies (in my opinion) is to not get YOUR license as an investor and ave your spouse get one. That way, you have the best of BOTH worlds! :D

With ongoing education requirements, dealing with paying of fees, meetings, listing entries into MLS, taking agent calls, and due diligence who has the time to be a investor?

Focus all your efforts on being an investor and leave the marketing of properties to those who focus on being a REALTOR. I recommend finding an agent or agents who will give you access to MLS or at least who can give you quick response for listing detail and CMAs.

I was a REALTOR and take it from me it is much easier being an investor. If I ever get demoted or fire myself, I guess I can always rehang my license.

Good Luck!

P.S. I like Will's idea about the wife being an agent..... I guess that would be one reason for me to get married!!

However, as an "investor" (newbie), what do you have to show for? It seems that although there are stipulations here and there, isn't attaining a license in RE saying to the world that you are committed to your career? For many newbie "investors", I think this is one area they can control and create value in.

Getting started is half the battle. Once you're up and going and partners and deals are in place and you are a "bona-fide" investor, then maybe you can decide to lose the license so that you can attain more flexibility.

This is a shortened down version of a conversation I had with a family member (seasoned investor) and myself (newbie finished with Brokers classes prepping for exam).

Sidenote: What are your guys' thoughts on education through such organizations as ULI and ICSC?

http://www.uli.org/sitecore/content/ULI2Home/ProfessionalDevelopment/RealEstateSchool.aspx

http://www.icsc.org/srch/education/university/uscindex.php

Are these of any value to investors?

Having a license also gives you the freedom to clam Real Estate Professional Status on your tax return.

Originally posted by Jon

In reading through the IRS documents on "real estate professional" status, and discussing this with my CPA, I can't see how a license has any impact on this at all. The regulations are that you must spend at least 750 hours doing real estate activities AND must spend more hours on that than anything else. It says nothing about being licensed or not.

I agree with Jon and have spoke to my attorney and CPA about this many times. Being a "licensed agent" has NOTHING to do with the IRS classification of "Real Estate Professional". Do not take the iRS term so literally. Not only does this classification require you to spend a min of 750 hours per year in RE, and spend more hours on that than anything else, you MUST have more than 50% of your income derived from RE to qualify. Keep in mind that while there are certain advantages to this classification, their are alos disadvantages.
Consult with your RE attorney/CPA in mkaing the right decision for YOU.

Be that as it may, the IRS classification is a federal one and not governed by states. The property limitations Scott mentions are additional issues on the state level.