How valuable is Real Estate License for Real Estate Investing

Question

Hello BiggerPocket Community -

I am a complete newbie in real estate investing, so I am ready to soak up the knowledge. How valuable do you guys think getting a real estate license is for the ultimate goal of real estate investing?  I know it's definitely not necessary, but I wonder if a formal education of sorts would be a good way to understand the industry and understand the language people are using?

Jay Hinrichs · Answer

@Lynn Montang

@Alissa Collins

Being a deal maker here in the PDX market I can tell you a license and access to MLS is will pay for itself many times over.. As you know our market is Uber competitive if your going to try to fix and flip... Also in our price points you save huge on  listing commish when you only have to pay one side. And if you have one your having a problem with you can offer a big selling bonus.

Now remember that many of the folks on this site are in the mId west and other markets that are dominated by very low value homes that really only get sold to investors.. So its a whole different real estate market here..

And with our average price point here the average commission is going to be 6 to 10k a deal.. So if you get good at just being an agent you will do better than most investors in other markets that might take 6 months to find a flip that works then they work another 6 months rehabbing and selling all to make 30k...

Keller has the best new agent training.. Other boutique shops will offer more one on one with investment oriented agents.  there is a big difference ..

Good luck with it... don't slip on any ice !!!

Jennifer Lee · Answer

Hi all

I am an investor that got my license. I have posted my journey on BP.  I have my license 1.5 yrs now.

The license is a tool, it is not a magic pill that will make you an investor.  Most agents don't really know what investing is. A Realtors job is actually opposite of investing, its sales.

Background:

My grew up with investors. My parents. I spend my weekends maintaining their rental.  Our dinner conversation is about investments, finance and deal anaylsis. No wonder I got a finance degree.

Education:

Needless to say, i have a lot of book knowledge. But my best teacher was my very first practical test. My very first flip.

In REI, not only do you need to understand Cash flow and opportunity cost, but you need to understand the projected vs actual costs. And only experience is the best teacher ;)

I quickly realized you also need management and communication skills.  My contractor totally abused me and our project was over renovated and took longer then planned.

I couldn't flip is as planned..but I had many EXIT PLANS. It became a rental.  Where I quickly learnt the VOES of being a landlord. 3 young college girls that never met rooming together.... That was a headache.

Finally, I flipped it making $1000. But I increased the value by $100k.

But I didnt give up, from there have done 5 transactions.

Flips, commerical rental build to suites etc. In 3 diffrerent states.

Decision to be Realtor:

*I couldn't find a Realtor like me. My Realtor had no idea what I want nor did she want to put energy on me

She sold $1M homes.

*I wanted direct access to MLS. Now I do, before I needed 7 site. I have everything in my finger tips.

* I wantes more resources. Hanging out with other investor allows me to be involved in exponentially more transactions without being involved. I treat my clients deals as my own.

*Distressed property, I am a SFR agent now, working short sale, foreclosure and REO.

My Realtor path is not the norm and I'm constantly battling with my brokerage bc although I have volume my sales are under 100k...I work a lot harder. I lose 50% of my transaction. But rather have my investors walk away then get in over their heads.

Mosy importantly, learning to BUY RIGHT, have the right EXIT PLANS, know how to HANDLE CONTRACTORS is the skills we need as investors.

A license only helps use find MLS deals. And gather mkt data. Data is data, its means nothing if you can't interpret it..

My find it funny, all agents are given the same tools, it just depends how we use it..

I don't regret getting my license. Best decision ever.

I only do 1 deal a year..so my license keeps me busy while I look. My goals is different from my clients so we don't "fight" over deals.

Hope that helps

Ryan Harthan · Answer

If you're going to spend a couple hundred thousand on real estate you may as well spend a couple hundred on a license.

Melissa Culpepper · Answer

I've been trying to  weigh out the pros and cons of getting my Real Estate License as well.

Con: I realize the intense level of customer service requires that you make yourself available at ridiculous hours to appease overly caffeinated clients.

Pro: On the other hand, I also do own vacation rentals and the majority of my guests are looking to move to this area so it could be icing on the proverbial cake (or VooDoo doughnut to us) to offer my Real Estate services to my guests.

Con: I would have to keep my car clean at all times

Pro: I would have to keep my car clean at all times.

Con: I do have some concerns that it could possibly distract me from focusing on my investment business. Or maybe it would distract me from considering other buying resources. Or maybe I just get distracted....

Pro: Unlimited access to the MLS would be nice but...

Con: we know that those listings get heavily picked over and it is harder to find "deals" there.

This seems especially relevant here in the northwest as it seems everyone and their dog is moving here....not that I am endorsing that you leave your dog behind when you move ; ).

Pro: Its pretty difficult to argue with a 6-10k commission. When's the last time I got a commission check like that?

Con: I break out into hives at the mere suggestion of paperwork.

Pro: Most of this "paperwork" has to be fillable online forms anymore with little yellow highlighted areas and bouncing red pointers that I just "auto sign", right?

Con: Oftentimes Real Estate agents seem to choose the blonde route. Must I buy and wear a blonde wig? That's a potential deal breaker.

Pro: Well, if Mary J. Blige can pull of a blonde wig, I suppose that I could do it too!

Hmm, well it appears that a trip to the car wash and a wig shop will be my first stops....then I'm in! Where do I "auto sign"?

Alissa Collins · Answer

I too am new in the industry, but I am currently pursuing my real estate license for a couple of reasons. My husband and I are working together as a team and we decided that one of us should get our license to maximize our resources and have more control in our deals. With a license you will have more access to information and data on the MLS, you can facilitate the necessary paperwork and contracts, as well as grow your RE network (in addition to what @Lynn Montang mentioned above. I'm not even half way through the coursework yet, but plan to be done in a couple of months. We will see how it plays out, but I think it's worth it in the long run. Cheers ~

Account Closed · Answer

Get ur real estate lic. but don't get hooked into the listing and selling culture. Keep ur eyes and ears alert, learn as much as you can, read expired listings every day, talk to

the sellers of expired listings, farm an area, offer classes for investors. Learn to become a fiduciary buyers agent. Counsel with investors, collect retainer fees, make offers for ur investors clients. Be the first to inspect new investment and commercial listings.  Know your market. Create credit lines so that you will be ready when that super deal presents itself to you.  Write your own loan. Enjoy your new profession as an investor.

Charles

Paul Ewing · Answer

One of the biggest advantages I see for an investor working MLS deals is that with your license you are in control of the process.  I will be able to go see the house as soon as it is listed.  I don't have to wait for my agent to have time to show it to me and process the contract.  My current agent is great and her family is full of investors and she has dozens of rental houses of her own, but I have to accept that her commission on my little $20k-$30k deals is barely going to keep the lights on in the office so I get worked in between other showings and contracts done at night but with Docusign that isn't such a big deal.

Weis Sherdel · Answer

I really appreciate everyone who responded to my message.  You guys rock.  This is a real community of good people.

Bryan L. · Answer

It seems that I type this just about every other day on here, but I highly recommend it to all of my students that they become Realtors if they plan to do anything at all with MLS deals.  Like others have said, search the forums, because both sides have been discussed on here VERY thoroughly.

Lynn Montang · Answer

I'm a newbie, so I haven't seen anything or looked up anything on this yet....  BUT, I met with my lender, who has a lot of experience, invests himself, AND he was adamant that I get my RE license because if my realtor (also a good friend w a lot of experience) finds a great deal he'll snatch it up himself!  Also, it's more money in my pocket with each and every transaction.....  this is the advice I got anyway.

How valuable is Real Estate License for Real Estate Investing

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