Does getting a Real Estate License and becoming a Realtor provide any edge?

Question

Hello Friends,

I am pretty much starting out my journey in real estate investing and hence posting this question:- Does getting a real estate license, passing the exam and becoming a realtor provide any sort of edge vs a non realtor?

Minus the traditional aspects of saving commissions when i purchase properties and having access to MLS, what are some of the other benefits of it ? Do i get to see deals first before they hit public websites like redfin, zillow etc?

Background:- I am in a very competitive real estate market of Los Angeles, and i just want to understand the real edge for a normal investor like me who's aim if to create a very small portfolio of condos for STR/LTR purposes in the area.

Thank you and appreciate everyone's assistance.

Eliott Elias · Answer

I hold my license for 2 reasons,

1. I can make as many offers (at any price) as I want

2. MLS access

Rick Albert · Answer

I'm going to play devil's advocate as an agent and investor (now mostly OOS) here in Los Angeles. The points made above are true but I wanted to share another side to give you honest prospective.

There is nothing about the licensing that will make you a better investor. The questions on the exam are primarily about buying, selling, and lending. In actuality about 95% of the questions on the exam you will never need or use.

It also doesn't keep you up to date on LA County/City rent restrictions, etc. You are still on your own.

If a Realtor has a "deal" of an investment property before it hits the market, there is an expectation that they will represent the buyer. Therefore you aren't always going to get a competitive advantage. The company I work with is affiliated with a developer. When we started representing our own buys, the deal funnel dropped significantly.

For conventional financing (not DSCR, hard money, etc.), most lenders want at least 2 years tax returns to show consistent income.

Now, I will say one of the best reasons is you get to learn from your clients. I have clients renting by the room to college students, mid-term and short-term rentals, and more. I get to learn from them while getting paid to find their deals.

Trevor Richardson · Answer

Agency is one of the best if not the best way to learn the real estate industry. Get a license and join a team. You will make money while learning the fairly complex world that we operate in. You will be helping folks and providing a service while learning the ropes.

Michelle Crochet · Answer

Hi Sidd!

As a realtor, you may have access to certain off-market or pocket listings that are not yet available to the general public. However, this is not a guarantee and is largely dependent on the individual realtor and their network. Additionally, having a real estate license can give you a better understanding of the legal aspects of real estate transactions, which can be helpful when negotiating deals or navigating potential legal issues.

However, it's important to note that obtaining a real estate license requires significant time and financial investment, and it may not be necessary for your specific goals. You can still find great deals and be successful in real estate investing without a license. Networking, building relationships with other investors and realtors, and doing your own research can all be effective ways to find deals and get ahead in a competitive market like Los Angeles. Hope this helps! :)

John Plamoottil · Answer

I agree with many of the posts in the thread. I think the advantage I'm seeing over any others without a license in my market is I can see listings in our private network before it hits the market as well as the network I have with other brokers, attorneys, inspectors in the area. I don't think my network would be as big if I didn't have my license and helped out other clients and learned/grew in the process. Best of luck to you!

Alexander Slawsby · Answer

the “edge” of getting a license would be that you can …

use your commission as a downpayment on a home.

Albert Blair · Answer

I believe there are many positive reasons to get a license. However, I think it depends on how many properties that you are planning to purchase a year. In addition, you would have to disclose that you are an agent when purchasing properties for your portfolio.

Jay Hinrichs · Answer

for sure there are deals to be made before they  hit the market..  or you will know about them and can offer on them the minute they are listed.

U see those all the time on MLS  the ones were Days on Market says 1.

Account Closed · Answer

Hi Sidd,

I am currently in the process of getting licensed. For me, I want to be in real estate full-time for the foreseeable future. As a result, I feel it is a good tool to have, and I can probably complete it within a month. As far as I'm aware, it won't provide you some great advantage in SF/MF rentals. However, if you have the time/money, it can't hurt to get your license. MLS is also a valuable tool to find deals as soon as they hit the market.

Tim Grich · Answer

Taxes- qualifying as an active real estate professional will allow for more write offs.

Does getting a Real Estate License and becoming a Realtor provide any edge?

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