Licensed or Not?

One of the questions that we wrestled with in the beginning was whether or not to get licensed as a real estate agent. I have seen this be a topic often debated on BiggerPockets and I thought that I would address the topic through our experience. We ultimately decided that my business partner would get licensed for the following reasons.

Run our own Comps- We started out using sites like Zillow, Trulia and county auditors to find comps and evaluate properties. We found that these sites weren’t accurate enough to really be beneficial for evaluating properties. Now with a licensed agent, we can run our own comps whenever we need. This has sped up our process of finding and evaluate properties

Make our own offers- MLS is swimming with competition for distressed properties. To be successful purchasing properties off of the MLS we knew that we would have to move quickly and write a lot of offers. We can now make offers ourselves and not have to work around another agent’s schedule. The first property that we every made an offer on was through another agent. We met the agent out at a property, which he showed up 10-15 minutes late. Then he didn’t have time to wait for our contractor to put together a full bid so he left which was fine because he really wasn’t adding any value. Later in the day after we got all of our numbers back I emailed the agent to make our offer. He called the owner (bank) and made a verbal offer in which they countered at 5k more than we offered. The agent feeling like we were getting close to a deal, sent over the offer paperwork to sign. I looked at the paperwork and the address was incorrect. It was a totally different property. So I asked which property he put the offer in on and he said the one on the paperwork. He made the offer on the WRONG house! It is small things like this we can avoid by having an agent on the team

Additional Stream of Income- The process of purchasing a house, rehabbing it and selling it for a profit can be a long process and in the end there are no promises that the property will sell quickly or for the price you wanted. We decided to hedge our risk by creating additional streams of income. One is multi-family cash flowing properties and the other is realtor commissions. We hope to provide great realtor services to other investors who are weren’t licensed. This additional income will help fill in the gaps between properties selling.

Accessibility to properties- As I mentioned, we felt that we needed to be able to act fast and this for us meant going to see a property when it comes through our MLS search. We knew working around a realtors schedule wasn’t going to work for us. We also knew that for most realtors we would be on the back burner because the house we were making offers on were low priced and it would take many offers to get one accepted. Now we see a house and we can schedule it usually within a half hour and then go see any comps that are currently listed. This flexibility gives us a nice advantage over those who aren’t licensed.

These are a few of the reason that my partner decided to get licensed and so far we think it was a great idea. For anyone who is looking for a good investor friendly agent, please reach out. We would be more than happy to help!