Agent experience useful as an investor?

[Logan Cox]

I'm working on getting my real estate license, but my long-term plan is to be an investor, and I'm worried that not much of my realtor experience will carry over. Is it worth being an agent for a few years before beginning to invest, or are there better ways to get into investing?

[Eliott Elias]

Holding your license is so valuable as a investor. I primarily invest and hold my license to 1. Get MLS access 2. Make commissions on my property 3. Can represent clients

[David M.]

@Logan Cox

There are both pro's and con's.  Other than what has been mentioned, it is useful to network and get into the "space."  the list, of course continues...

But, it depends on what sort of investing you are planning on doing... Realize that the "best" deals are normally to be found off market (that being said, I purchased my rentals on market...). Cost just to hold your license active is $2k-$3k annually. The state licensing fee is peanuts, but its the various dues and fees (to NAR, to the MLS and potentially more than one, your E&O, etc.). This doesn't include any advertising or anything --- just to keep it active (so that you access the MLS as many promote).

If you are doing buy and hold, after you "finish" your purchases you won't be doing much more...  however, if you plan on active selling real estate, it will/should give you experience about how deals re done, how they go bad, and you can experience through your clients the variety of troubles that can happen, as opposed for paying for themselves.

Are there otherways to get involved, sure.  It just depends on what you wan tot do, how much time/energy, etc.

Good luck.

[Nathan Gesner]

Quote from @Logan Cox:

A couple big problems with being a real estate agent:

1. You have no income, making it difficult to finance purchases;

2. It typically takes 2-3 years to build enough business that you can make a decent living as an agent. It's even harder to make enough to invest;

3. You may "save" the commission normally paid to a buyer's agent, but you are an amateur representing yourself. It would be better to have an experienced agent representing you that is emotionally detached from the transaction, better at negotiating, familiar with the market and laws, etc.

Another option I like to recommend is property management. Steady income (often paid more than the average sales agent earns in commissions), and you can learn what most Landlords never do: how to manage investments.

[Drew Sygit]

Just jump into investing!

A license shouldn't hinder you. Yes, it's nice to access the MLS, but just find a good investor agent.

Regarding paying yourself a commission, that's absurd! The commission is part of the sales price, so your actually creating a taxable event on the income instea of just negotiating a lower price.

Also, a license may handcuff you as an investor. Most states attach a fidiciary responsibility/liability to agent licenses. Meaning if you are an agent, you MUST disclose to a seller the true value of their property that you want to lowball them on. We know two agents in Michigan that had to settle out of court on such transactions where they did NOT disclose the actual value before buying from a seller.

[Gideon Sylvan]

It will definitely gain you more experience with how the market is doing, give you more confidence gained from experience, and save you money buying/selling. The biggest challenge for me has always been the rehab, but I feel pretty good about acquisitions and sales side from my agent experience. I also think it provides you with the cleanest off market pitch: I think your house is worth $600k and I can help you sell it for that—it'll take some time to clean it up, we'll have folks walking through for a few weeks or months, but I think you can get $600k—if you want to sell it today, I can buy it, but I am an investor and need to weather the risk, so I can only offer $550k.