(3) Reasons you should be a Realtor and Real Estate Investor

by | BiggerPockets.com

They say you shouldn’t eat at least an hour before you go swimming.  They also say that two wrongs don’t make a right, that you get what you pay for, you can’t win them all, nobody ever said life was fair, what you don’t know won’t hurt you and there’s no such thing as a free lunch. 

So who are they?  I’ve gone swimming immediately following a big dinner and managed to avoid drowning.  And, last week I did get a free lunch paid for by the marketing rep from my title company.  I think they are all full of bull fertilizer.

Chances are if you are a real estate investor or are considering getting into real estate investing you’ve wondered whether or not you should get your real estate license.  What do they say about that?  When I first started investing in real estate in 2001 I talked to several attorneys and they all advised against it.  Why?  Two reasons – disclosure and agency.

As a Realtor you are held to a higher standard and therefore open yourself up to potential problems if a real estate deal goes bad.  That’s why you must disclose that you are a Realtor upon initial contact and later in writing with an agency agreement that states you do not represent the seller of the property.  Most importantly, it must be clear that your intent is to make a profit from the transaction.

Contrary to what they said I decided to get my real estate license in 2007 after operating a successful real estate investment business for six years (my business imploded at the end of 2006 but that’s a topic for another day.)  Why did I do this?  Three reasons:

  1. Access to the Multiple Listing Service (MLS)
  2. Increased visibility in the local real estate community.
  3. Additional revenue streams.

Access to the Multiple Listing Service (MLS)

From 2003-2006 it was laughable to think that bargains could be had on the MLS.  Then, three years ago this little thing called the real estate bubble burst and ever since the MLS has been overflowing with REO and short sale deals.  I wanted access to this database.  For the past 18 months I’ve been scouring the MLS almost every day searching for and finding good margins.  I also use the MLS to comp houses we buy at trustee’s sales.  I spend about 3-5 hours a day on the MLS and it would be unrealistic to ask a fellow Realtor to do this for me (or use their MLS login info – this is frowned upon by most local Realtor associations.)

Increased Visibility in the Local Real Estate Community

Let’s face it, most Realtors know very little about real estate investing and it’s not their fault.  The training they get is designed to help them generate business with retail buyers and sellers.  That’s where I come in.  Realtors like to refer deals to me because I’m one of them and I have real estate investing experience.   There are other perks too.  I teach a continuing education class for Realtors at a local real estate school that has helped me grow my database of coaching clients and investor/partners.

Additional Revenue Streams

I do not list the properties we flip.  I can’t stand working with retail buyers or their agents.  However, I do write offers on the REO and short sales I find on the MLS and collect commissions to do it.  Occasionally, I have a friend or family member that wants to buy a home and I can refer them to a buyer’s agent for a fee.  This income isn’t too consistent and it doesn’t put food on the table.  However, it does make my wife happy – especially if I spend the money on her.   

So are there risks in having your real estate license if you are investing?  Of course!  There are all kinds of risks associated with real estate investing.  But, as I’ve outlined here the rewards are much greater.  As long as you are careful with your paperwork then those risks are drastically reduced.   Just remember if you do end up in court because of a deal gone bad then you will be held to a higher standard.  And I say what’s wrong with that?  I didn’t become a real estate investor to be held to a lower standard.

Maybe becoming a Realtor isn’t for you.  Fine.  I still recommend you enroll in the licensing classes in your state.  Why?  Because you know what they say – you learn something new every day.

About Author

Marty (G+) is the Chief Financial Officer for Rising Sun Capital Group, LLC, a real estate investment firm based in Gilbert, AZ. His firm purchases homes at the courthouse steps and public REO auctions. They have two exit strategies, either fix and flip or seller financing.


  1. Marty, this is a great post. I am not an agent but my partner is. We focus on short sale flips. He never lists the properties we buy, but his brokerage does and he has another agent act as a “facilitator” on the home if we do flip it. We have a “relationship disclosure” we include in our package to the homeowner that outlines that my partner owns the brokerage AND is also a primary member in our company so the homeowner is fully aware of what is going on (other than we’ve explained it to them a 1000 times). His agents also make 100% commission on any property we flip, so that he never sees any portion of the commission…only the profit from the flip.

    Dislcosure is key in this.

    I will say I like being non-licensed as I can approach homeowners and sometimes we find out after the fact the property is listed. Most agents don’t seem to care when they realize we aren’t there for the listing…only to buy the property.

  2. I can see both ways, at the end of the day I’m glad I’m licensed. I cant do 1-2 things I would like to do without a license, but the other opportunities have outweighed the bad so far. I’m licensed in CO and AZ, and have found nothing but good things for the most part about getting my license. MLS access is HUGE, now that CO and AZ’s MLS systems only allow one user at a time. (I know there is a workaround in CO for assistants or something, but for now you cant do it as is).

  3. Just be sure that folks understand there is a difference. You can be a Licensed Real Estate Broker and NOT be a Realtor. But you can’t be Realtor unless you are a Licensed Real Estate Agent. The Realtor Association does have a monopoly of sorts with the MLS. It is too bad that a Licensed Real Estate Broker cannot have access to the MLS unless they join the Realtor Association.

  4. Mike, you might have just confused things even more. The difference between an Agent and a Broker is that the Broker has additional education, experience, and the ability to operate independently. Agents must work under a Broker; the Broker can work on their own or open an office and have other Agents working under them. Both Agents and Brokers are licensed to buy/sell and both have access to MLS.

    • The term “Realtor” should be used only by those that join the National Association of Realtors (NAR) which is a trade organization. One can be a licensed Agent or Broker without being a Realtor. To be a “Realtor” one need only pay dues to NAR and subscribe to their code of ethics.

      • Nathan and Mike,

        I should have made it more clear in my post that there is a difference between having a real estate license and being a Realtor – they are not one in the same. You can get a real estate license and not be a Realtor. I got my real estate license and then joined the Southeast Valley Assocation of Realtors (SEVRAR) in 2007 to gain access to the MLS. It doesn’t make much sense for a real estate investor to go through the trouble of getting a real estate license and then not become a Realtor.

        I apologize for the confusion.

  5. I’m still on the fence about getting my license. I have an investor friendly Realtor who helps me find leads on the MLS. It’s sometimes difficult getting leads in a timely fashion since she sometimes doesn’t understand what my criteria is. But after reading your article I’m leaning in the direction of Realtor.

  6. This is something I have tossed back and forth in my head for quite a while.

    I did have the fiance get her license, so I do have access to the MLS and we also get $$$ on closing. While she is still a realtor, I doubt I’ll get mine …. If she ever decides not to do it any longer, I will get mine.

  7. A fine post and your positive points for getting a license are good. I would disagree with the following response you made, “Access to the MLS 24-7 is a must in our current marketplace.” I am an investor only, and do not hold any RE license personally, and operate a successful investment business without personal 24/7 MLS access. In fact, I contend that buying REO properties BEFORE they ever hit the MLS is a key factor to my success. I continue to let my team mebers provide the MLS info I need when I need it.
    This of course, is a personal choice and I believe that which ever route someone chooses, there is no right or wrong, is no must or must not. To each is his own and hopefully, each chooses the right decision for themselves.

    • Will, MUST was probably the wrong choice of words. However, as you pointed out in your comments you have someone on your team who does have access to the MLS and I think you would agree that this is important. You mention you buy REO properties before they ever hit the MLS. Can you explain that to our readers?

  8. I recently came to that conclusion before I signed up with my present real estate office. This is great. It lets me know I made the right decision for the right reasons and I’m on the right track. Thanks for the confirmation.

  9. Hi,

    thanks for the article. I have thought about getting a license, but I thought that the main advantage is that you can save quite a bit of money, when you sell the property, because you are your own seller’s agent and won’t have to pay the commission to somebody else.
    However you haven’t mentioned this at all? Why? Do you think it’s not advisable to do this?


    • John,

      I didn’t mention this but yes, it is nice to save on part of the commission when you sell one of your own properties. However, I don’t take a commission when I list my own properties. Here’s why – I don’t use any of my own money when I acquire a house. I partner with an investor that has all the cash for acquistion, repairs, holding costs and we split the profit. It would be unfair for me to earn a commission AND take a portion of the profit.

  10. I am a Realtor, and a Real Estate investor.
    Nobody wanted to help me buying those 10k dollar houses, because the comission is too little. That’s why I took the test and enroll on the MLS, now I get the flip and the comission.

    • Javo,

      I didn’t have time to mention this in my post but that is another great reason to become a Realtor. Most Realtors aren’t very excited about showing investors properties under 50K. The commission is too small. Again, access is key. Not just to the MLS but to the actual properties. You can view these properties on your schedule, not the agent’s.

  11. Commission savings on the sell side is one thing, NOT having to deal with retail agents and buyers directly can be worth the extra 2% or so sometimes.

    I will say, on the BUY side, I rarely take a commission. If you cant pull a Will and get BEFORE MLS, the next best thing is letting the agent double end the commission as an incentive to get your offer through. After that, I will take a commission if the agent refuses to double end the deal (for whatever reason).

  12. I have to agree with Will on this one about the MLS. I’m not a Realtor but I do have my license. With that said; The only thing I find extremely helpful about the MLS is the Agent notes that the general public never gets to see. Not always, but, most of the time the listing agent will give out personal info about the seller, must sell, wants to retire, etc. Also, many times you will see specific things about the property, i.e. Easements, no permits for additions, lender/investor will finance, etc. The other thing is; especially in this market, most of (40K +) properties on any given day, never get listed on the MLS. They go to my Investor/buyer clients first! Finally, I also agree with the fact that the benefits of having a license, out weigh any downside. Whether you agree or not-Having a license also gives you instant credibility with buyers and sellers.

  13. Marty, I have just got licensed as an agent. But have not registered with the board of Realtors yet. Could you please give me an advise how to get my first client? Are there any good web-sites I can advertise myself?
    Thank you

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