Will becoming a part-time real estate agent help my investing?

Question

I have owned a duplex for several years. It cash flows well and a lot of equity. It is unlikely that I will leave my W-2 job but my end goals with real estate are to grow my portfolio so that (1) pay for my kid's college (in 15 years), (2) use my money wisely to supplement my state retirement (in approximately 20 year), (3) cash flow enough to re-invest and continue to grow my portfolio and maybe go on a few family trips in the process.

My question is would becoming a part-time RE agent help me achieve my goals? I was wondering if that would help me learn more about real estate, connect me with more deals, help me build up additional cash to invest, etc. I know it would be a lot of work to do part-time but it seems like it could help and I think I could enjoy it as well.

Any feedback from more experienced investors would be helpful.

Forrest Williams · Answer

Probably not. If you're buying more than 1 deal per year for yourself then maybe, but still probably not. There are a lot of fees associated with being a realtor. You need to pay for the MLS, that's $1000 or so per year, licensing fees every year, class costs too. If you want to be a part time broker to get clients, you'll be paying for advertising possibly. And there are desk fees as well, it costs between $50-100 a month to have your license with a brokerage. And the commission will be split by your brokerage too, so if you earn $4,000 for a closing, you'll be paying half that to your brokerage. And you'll get taxed on your profit as well.

Right now you've got a W-2 and one building. I would find a good local realtor, and go to them when you want to get another place.

Franklin Romine · Answer

Nope

Nathan Gesner · Answer

It may make sense financially, as long as the market is strong. When the market is weak, you'll be fighting for scraps to try and get enough sales to justify the cost of your license.

You can already write your own contracts and save commission, so what's the point? A good REALTOR understands the market better than you do. They know the laws, particularly contract law. They are good at negotiations and they can negotiate from an objective position without letting emotions get in the way. If you represent yourself, you take away all the value of a good REALTOR.

James Dainard · Answer

Hey Kyle,

There are a lot of benefits to becoming an agent like reduced agent fees and increased MLS access. You can also help write contracts for friends and family to make a commission!

With that said you want to make sure you let your full-time agents list the properties, you're going to sell. Industry professionals know what it takes to get a property sold and having someone manage that process for you will make your life a lot easier.

Make sure you know what the costs are to keep your license active and have a plan in place to make that back with the license or the RE investments you get by getting your license. Make sure becoming an agent doesn't change your investing priorities and doesn't burden your financial situation.

Best of luck!

Wale Lawal · Answer

@Kyle Hey

There are numerous ways to make money from real estate. While you might be the most successful agent in your local market, you can increase your income and net value by investing in real estate yourself. After all, you are already an expert on buying and selling real estate, so why not use this experience for building your own investment portfolio?!Here are the six most important benefits which you have as a real estate agent when you invest in properties.

1. Expert knowledge of the local housing market2. Ability to conduct your own analysis3. Access to all the best deals4. Easier financing5. Real estate network6. No need to hire an agentRead this article for detailed information https://www.realestateexpress....

Good luck!

Drew Sygit · Answer

@Kyle Hey one of the challenges of being  a licensed agent is your fiduciary responsibilites/liabilities to a seller.

CHALLENGE: seller calls you up to list their property, you know it's wortk $100k, but when you ask what they want out of it, they tell you $80k. So, you go into investor mode and offer them the $80k and close on the property. Later, the seller finds out their property was worth $100k and sues you and WINS because you never told them (or properly documented that you did) the true market value of their property.

Kyle Hey · Answer

Thank you, everyone. This is all helpful feedback to consider so far.

Shawn Mcenteer · Answer

Hi @Kyle Hey I started out as a part time realtor for about 5 years.   I was very content closing a few deals per year while focusing on my personal investment.  I now got to the point where it made most sense to go full time and work with house hacking clients.  People give such negative feedback towards being a part time agent but the way I look it it comes down to how you manage your time and having the correct systems in place.

Paul De Luca · Answer

@Kyle Hey

You've received a lot of good advice here regarding the pros and cons of being a part-time agent. To sum it up, I think yes being an agent, whether part-time or full-time, will help with your investing for the education, experience, access to deals/MLS/statistics, and commissions. I'm pretty sure buying just one deal per year will cover all or most of your realtor related expenses depending on the sale price.

I know that I've definitely become a better investor by being an agent for the above reasons.

Joseph Beilke · Answer

@Kyle Hey

The short answer is yes and no.  I started by doing exactly what you talking about. My goals were little different but fundamentally the same, this is how it involved for me.  I work as a Firefighter and most firefighter have a side hustle.  I know I wanted to own more properties and supplement my retirement with cash flow.  I bought a home and afterward the agent that helped us took me under her wing and gave me down and dirty of the work on being a REALTOR.  She got sick and passed away a few years back so the short time I had with her was greatly valued.  I took my license and started to try to drum up business from my fellow firefighters.  My first listing was my Chief.  He gave me a shot as long as I worked with a seasoned agent in his area.  It worked out perfectly, I found an agent in another office from the same company and split the commission 50/50 from the sale.

I was off and running.  Over the next 6 years I got a far amount of business from my fellow firefighters until one figured out the Flat fee saved them some commission.  Did he leave money on the table, yes.  Would it have been more than my commission, NO.  So yes he saved money.   This become a tread in the dept and as hard as I tried the value I brought to the listing wasn't enough for some.  In the last 3 Years I lost 3 listing to flat fee services.  I spent more time reading books and learn about investing better.  Also my wife quit her job and got licensed and her broker licenses.  We partner up with 2 others and started our own brokerage in Aug of 2020.  I found out that she's better with buyers and I am a numbers guys and started working with investors more.  I took a little step back and focused my time learning more about multifamily and property management, and STR is next.

You're probably asking how is this relevant to your question.  Getting my license provided me the opportunity to get into the know of the market.  I learn that having a full time job and trying to build a real estate business was very hard to do at the same time, along with everything else in life.  It took me 6 years to figure out how I fit in best and it was with investors.  When ever I get a firehouse buyer or listing I hand it off to the wife.  We bought another rental ourselves and used the buyers agent commission to cover our closing cost.  We are working with a few investors currently looking for STR, Longterm and we have a few ground up builds going.   Having my license helped my learn so much more about the business and it made people feel more comfortable talking to me about it.

If you just get your license for access to the MLS its not gonna be worth it.  You need to be active in the industry and learn from others, do some deals for friends and family, get referrals.  Use the commission to save money for the next investment for you.  But you gotta learn business and understand the numbers.

But please do not become the agent that list a property for a friend,  listed for $550K and gets $1500 a month rent.  Then say "investor alert, Great ROI!"  You will look like a fool and will be treated as one.

Good luck and if you wanna chat more please feel free to DM me.

Will becoming a part-time real estate agent help my investing?

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