As a RE investor does it help to have a RE license ?

6 Replies

It has both positives and negatives. Everyone knows the pluses so I'll point out some minuses. (I'm in Arizona so your results may vary) Compensation can only be paid to a licensed broker so you can't pay "finder fees" to unlicensed bird dogs or wholesalers. You must disclose that you are a licensed agent in all transactions and many people do not want to work with agents. If you find yourself in court you will be held to a higher standard and could lose if determined that you used your superior knowledge to take advantage of a non-licensed person. You will have to pay mls fees, licensing fees, national association fees, local association fees, and broker fees. You will have to pay for and attend CE classes to keep your license current. If you violate any rules you will suffer the wrath of the department of real estate. Investor agents don't always save as much money as they think they will after paying broker commissions, fees, and doing all of the work. If all I did was investing I would consider canning my license.

@Salvador Kalil , there are benefits but also drawbacks as @Matt Shields pointed out. You will have to disclose that you're licensed on any offers you make and a lot of people don't want to do that. Once a seller hears that you're a licensed real estate agent, they can shut off. So it's ultimately a business decision you have to make. There are fees for licensing and maintaining your license as well. You would get access to the MLS if that is something you are seeking, but you should weigh all the benefits with the drawbacks.

@Salvador Kalil I was an agent but gave up my license as I felt it was to confining. I am an out of the box thinker. The real estate agent side of the business does not like that. 

The most important thing is access to real comps. This usually means MLS access. The best and easiest way to get that is to be an agent. My partner is an agent and I am his assistant so I get access that way.

@Salvador Kalil

As my colleagues have said there are pros and cons. I am a developer in Northern Jersey and I can tell you that the benefit of the license is the ability to access the MLS. There is also the perk, depending on which brokerage, saving on the commission when you are selling. Yes, representing yourself in a transaction will turn sellers away but that shouldn't deter you from finding the best method for your area to get passed that.

I wouldn't. I actually started and stopped half way. I make way more money as an investor so I don't need the distraction of being an agent. I would also be bound by certain rules imposed by the local real estate board. And there's a cost to maintain it every year. If I need access to the other side of MLS I just drop in and see my realtor.

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