{"id":111468,"date":"2020-08-10T05:00:19","date_gmt":"2020-08-10T11:00:19","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=111468"},"modified":"2023-03-20T13:52:53","modified_gmt":"2023-03-20T19:52:53","slug":"real-estate-license-invest","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/real-estate-license-invest","title":{"rendered":"Real Estate Investors: Should You Become a Real Estate Agent?"},"content":{"rendered":"\n<p>Do you have to have a real estate license to invest in real estate?<\/p>\n\n\n\n<p>Nope.<\/p>\n\n\n\n<p>For&nbsp;BiggerPockets,&nbsp;my name is Brandon, signing off.<\/p>\n\n\n\n<p>OK, OK. Let&#8217;s be serious. No, we don&#8217;t think that every investor needs a real estate license\u2014in fact, a license is overkill for most investors. That doesn&#8217;t mean there aren&#8217;t good reasons for <em>some<\/em>&nbsp;people to get their license. After all, hundreds of investors choose this path each year.<\/p>\n\n\n\n<p>Some see a license as a way to learn the ropes before investing. Or they perceive being a <a href=\"https:\/\/www.biggerpockets.com\/agent\/match?utm_source=blog&amp;utm_medium=blog-ad\" class=\"rank-math-link\" target=\"_blank\">real estate agent<\/a> as a path to a paycheck. Maybe you love the real estate industry, and want to pursue agenting as a full-time career. Yet ultimately, most realize that\u2014while there can be advantages\u2014a license is typically a long and expensive detour.<\/p>\n\n\n\n<p><em><strong>Related: <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/dont-get-real-estate-license?itm_source=ibl&amp;itm_medium=related&amp;itm_campaign=opt\" target=\"_blank\" rel=\"noopener noreferrer\">Do You Need a Real Estate License to Flip Houses? Nope. Here\u2019s Why<\/a><\/em><\/p>\n\n\n\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/CcqJSbQUL4g\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\" width=\"560\" height=\"315\" frameborder=\"0\"><\/iframe><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Perks of Being a Real Estate Agent and an Investor<\/h2>\n\n\n\n<p>Having a real estate license can come in handy for an investor. If buying and selling investment properties is your primary source of income, why would you want to limit your access and abilities? Truthfully, a real estate license can serve as an essential element of your real estate business\u2014even though, again, it&#8217;s absolutely not necessary.<\/p>\n\n\n\n<p>There are a few reasons that this is the case.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Direct access to your local MLS<\/h3>\n\n\n\n<p>First and foremost, having a license gives you access to the local multiple listing service (MLS). While there are certainly other methods of access, having your license means you won&#8217;t rely on other agents, friends, or colleagues for access, and you can quickly find good deals. You can also post homes and rental properties without having to work with an agent.<\/p>\n\n\n\n<p>A licensed real estate agent can get into almost any property that is listed for sale with a special key and lockbox. In other words, you don\u2019t have to wait for someone else to go see a property.<\/p>\n\n\n\n<p>If the home is vacant, you can head over anytime, assuming the home has the special lockbox present. If the home is not vacant, you can set up a time to view it without having to fit into another agent\u2019s schedule.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n    \n  <div id=\"visibility-group-block_43a8c4b2bd2ce089833a48f79e6884cb\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_ce1207ebf2e142d3a03538a80f4ca2e7\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_f8d1af0a01fb4793c6ff6550437a8864 class='button-custom-event'>\n      <a\n    href=\"https:\/\/www.biggerpockets.com\/agent\/match\"\n        x-on:click=\"window.analytics.track('Blog Block | B2C Marketplace Agent Finder', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/real-estate-license-invest',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a\n    href=\"https:\/\/www.biggerpockets.com\/signup\"\n        x-on:click=\"window.analytics.track('Blog Block | Acquisition | Free Membership Signup', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/real-estate-license-invest',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Make more money<\/h3>\n\n\n\n<p>Every time an investor sells a house through another agent, they spend about six percent of the sale price in agent commissions. And when they buy property, their agent also collects up to three percent for facilitating the transaction.<\/p>\n\n\n\n<p>This means that on a typical purchase and sale of a property, an investor could access about six percent of the property&#8217;s purchase price in extra profit&#8230; if they didn&#8217;t have to give that money up to an agent. If you buy a property for $50,000 and sell it for $100,000, that&#8217;s $6,000 in additional profit\u2014assuming your buyer didn&#8217;t have their own agent\u2014you could have if you were your own agent on the purchase and sale of that deal! With just four deals per year, having your real estate license could earn you an extra $30,000.<\/p>\n\n\n\n<p>Therefore, as a real estate agent, when you buy a property, you can represent yourself and use that commission toward your down payment, repairs\u2014or a trip to Jamaica.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Controlling your own deals<\/h3>\n\n\n\n<p>Being your own agent allows full control over your real estate transactions\u2014whether you&#8217;re searching for commercial property, short sales, or ideal fix-and-flips. You can submit offers to and negotiate directly with listing agents. You deal directly with the lenders, the appraisers, the inspectors, the closing attorneys, and all other involved parties. You control your marketing, sales, and showings.<\/p>\n\n\n\n<p>Licensed agent-investors can stop worrying about minutiae. Will your agent drive to your property before every showing, turn on the lights, open the windows, and put out fresh cookies? Follow-up with everyone who has viewed your property to get feedback and recommendations? Send marketing materials to renters in the neighborhood who might be looking for a house to buy? Meet the appraisers at the property?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Enticing listing agents<\/h3>\n\n\n\n<p>Imagine you&#8217;re the listing agent for a bank-owned foreclosure. And imagine one day you get a call from an agent whose client is interested in buying that property.<\/p>\n\n\n\n<p>That agent says to you:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>I&#8217;m going to submit an offer on this property. All you need to do is get the bank to accept the offer. After that, I will take care of letting my client into the house for inspections, I will take care of getting the utilities turned on for the inspections, I will complete all the additional paperwork, I will work with the&nbsp;title company on the title search, and I will work with the closing attorney on scheduling the closing.<\/p>\n\n\n\n<p>Then, on the day of closing, you don&#8217;t need to even show up. I will get your lockbox and your sign from the property, I will get your commission check from the closing attorney, and I will drive all of it over to your office immediately after the closing is finished to drop off to you. Oh, and by the way, I&#8217;ll also give you my half of the commission as a bonus, so you&#8217;ll earn twice as much money on this deal.<\/p>\n<\/blockquote>\n\n\n\n<p>Do you think the listing agent would be interested in working with you? Of course they would. If you can provide these perks, agents are more likely to let you know when properties are getting ready to hit the market or have price drops. They might even clue you in regarding how much the sellers are willing to negotiate.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Closing speed<\/h3>\n\n\n\n<p>In a competitive real estate market, the early bird often gets the worm. As a real estate agent, you can be the first to know of real estate deals that are listed.&nbsp;I am not a real estate agent, but many of my investing friends are. And I\u2019m often jealous of their incredible tools that make them faster than I can be.<\/p>\n\n\n\n<p><em><strong>Related: <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/rockstar-real-estate-agent?itm_source=ibl&amp;itm_medium=related&amp;itm_campaign=opt\" target=\"_blank\" rel=\"noopener noreferrer\">How to Be a Rockstar Real Estate Agent: 9 Tips for Standout Success<\/a><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Real Estate Investors&nbsp;<em>Shouldn&#8217;t<\/em>&nbsp;Get Their License<\/h2>\n\n\n\n<p>Wow! That sounds pretty awesome, doesn\u2019t it? But before you run out to get your license, let me explain a few of the downsides.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Actually getting your license<\/h3>\n\n\n\n<p>Well, for starters, <a href=\"https:\/\/www.biggerpockets.com\/guides\/becoming-real-estate-agent\" target=\"_blank\">becoming a real estate agent<\/a> is not as easy as signing a document. There&#8217;s a lot of extra work to have your own real estate license. First, you have to take an extensive class (depending on the state, the class could be up to 120 hours in length), and you must pass a difficult test, which may require long hours of studying. Plus, you\u2019ll probably be required to earn about a dozen hours per year in ongoing education credits to retain your license.<\/p>\n\n\n\n<p>And if you want to be a Realtor, not just a real estate&nbsp;<em>agent<\/em>, the National Association of Realtors requires additional coursework.<\/p>\n\n\n\n<p>This takes away time from actually investing in real estate!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Working under a broker<\/h3>\n\n\n\n<p>In addition, once you have your license, you need to find a broker to work under, which involves additional fees and responsibilities. Do you want to essentially work as an employee\u2014or have your own independent business? While the support of a brokerage can be a great help, it&#8217;s an additional burden for real estate investors.<\/p>\n\n\n\n<p><em><strong>Related: <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-brokerage-pros-cons\" target=\"_blank\" rel=\"noopener noreferrer\">7 Pros &amp; Cons of Working Under a Broker as a Real Estate Agent (&amp; How to Choose One!)<\/a><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Paperwork<\/h3>\n\n\n\n<p>If you do a bunch of deals, you\u2019ll end up doing a bunch of paperwork. This is the most annoying part of having your license. You\u2019ll be responsible for writing your own offers and submitting forms to attorneys, agents, brokers, and the MLS.<\/p>\n\n\n\n<p>That said, there are people who can handle most of the paperwork for you (for a fee), so even that\u2019s not required if you really don\u2019t want to or can\u2019t do it. But again, part-time investors may find the paperwork requirements a bit daunting in terms of time commitment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Disclosures<\/h3>\n\n\n\n<p>When you have your real estate license, you are held to a higher standard. You must disclose to buyers\/sellers that you are a licensed agent, and you can\u2019t \u201cknowingly take advantage\u201d of a buyer or seller. Some investors feel that having to make these disclosures and being held to this higher standard negatively impacts their business, and that is why they don\u2019t want to get their license.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Cost&#8230; with no guaranteed money coming in<\/h3>\n\n\n\n<p>And we&#8217;re not just talking about exam or initial license fees. Once you become an agent, you\u2019ll pay several thousand dollars in fees each year just to hold onto your license. Of course, if you\u2019re making money as an agent, maybe this isn\u2019t such a big deal.<\/p>\n\n\n\n<p>All of this training and expense doesn\u2019t even come with the guarantee of a paycheck. In fact, you could easily go three to six months before seeing a penny from a closing. Even if you market yourself as a seller&#8217;s agent or a buyer&#8217;s agent\u2014hoping having more clients brings in more cash\u2014you still likely won&#8217;t see cash for a while. Plus, the average real estate agent only barely makes minimum wage. To make any money, you have to hustle every day and invest in a variety of marketing efforts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Distraction from real estate investment<\/h3>\n\n\n\n<p>And finally, the reason I\u2019m not an agent:&nbsp;<em>I want to focus on my investing.&nbsp;<\/em><\/p>\n\n\n\n<p>Look, I\u2019m already busy enough, between raising a toddler, investing in real estate, trying to pretend I\u2019m a surfer, and hosting the&nbsp;<a href=\"https:\/\/www.biggerpockets.com\/podcast\" target=\"_blank\" rel=\"noopener noreferrer\">top real estate podcast<\/a>&nbsp;on earth with over 60 million downloads. I don\u2019t want to add one more possible distraction to my life.<\/p>\n\n\n\n<p>When it comes to real estate, I\u2019m going to let my agents do what they are really, really good at doing, and I\u2019m going to focus on what I\u2019m really good at doing. Plus, I don\u2019t need the extra income.<\/p>\n\n\n\n<p>If I had a job I hated and needed to replace that income quick, you know what, I\u2019d probably become an agent. And I\u2019d learn how to be a successful one. Maybe that\u2019s you? But maybe not.<\/p>\n\n\n\n<p>So should YOU get your license? Really, it\u2019s a personal decision. I know that\u2019s a lame answer, but the truth is there are plenty of examples of individuals who have had a license and found success and others who achieved greatness without it.<\/p>\n\n\n\n<p>I know that was about as clear as mud. But hey, I tried.<\/p>\n\n\n\n<p><em>What else can I tell you about being an agent-investor versus being strictly an investor?<\/em><\/p>\n\n\n\n<p><strong>Ask me in the comment section below.&nbsp;<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Real estate investors certainly don&#8217;t need their license\u2014but there are good reasons to level up your game. Here, we break down the pros and cons. <\/p>\n","protected":false},"author":710,"featured_media":121921,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[7042],"class_list":["post-111468","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners","tag-seo-optimization"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/111468","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=111468"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/111468\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/121921"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=111468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=111468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=111468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}