As an aspiring real estate investor, I was curious about something. I'm Realtor (only since June of this year), and I was wondering how that could potentially affect my investing business both positively and negatively?
The first thing that comes to mind in terms of a positive aspect, would be my access to my local MLS. I imagine that gives me a great advantage among my piers. Not to mention, I have build somewhat of a rapport with: other Realtors, other investors, mortgage professionals, title companies, and most of all past clients.
When I think of would could be consider a negative aspect, would be things related to disclosure, and conflicts of interest with my brokerage (I am currently with Long & Foster). I could be over thinking this though.
I would to get some feedback on this, by some fellow investors, who also have their real estate licenses. In my opinion (and again I'm just getting started), I have to believe the positives far outweigh the negatives.
The "disclosure thing" is real easy to comply with. Really not a problem. I don't see any potential "conflicts of interest" either with my broker. If I'm buying something that is a FSBO, that's totally separate from the brokerage. And legally, I have every right in the world to sell any of my properties "by owner" (with the disclosures) and not list it with the brokerage. My broker might not like it, but I could do it. But I chose not too anyway because I know the value of listing it. There's really no down-side to being a Realtor. Yes, there are some costs, but those can easily be repaid by just listing one or two houses a year (think friends and family - pretty easy).
No problem. When I was a new agent I continued to invest and at that time California had a list of the Real Estate Commissioners Regulations as part of the Code. Later it was removed, but during that time we had to disclose even though we were acting as a principle and not an agent.
I found out it was no problem, I just created a written disclosure that said I was acting as a principle in the transaction and in no way was I acting as an agent for the sellers or buyers I was just representing myself.
I also said that my being a licensed agent it was a benefit to them because I was knowledgeable about real estate law and familiar with the proper contracts, etc. and had a relationship with some of the best title companies, mortgage brokers and other professionals that might be needed during the transaction to insure a smooth as possible transaction for the both of us and they wouldn't have to worry about dealing with someone that was flying by the seat of their pants and full of misinformation.
Almost every one loved I was licensed and knowledgeable except for those few that were intending to play games during the transaction and avoid the disclosure of material facts and hoping to extort some more money from me during the process. Also a few wanna be sellers that didn't actually own the property and had no legal interest whatsoever.
I agree with all that has been said to this point and would add that if you choose to work with serious investors, you'll have people who can purchase investments you might not want. It will also expose you to potential mentors who could help you if you decided to transition out of brokerage at some point.
The only downside I see is when you pursue purchasing property on the MLS and are competing with bids of buyers that went direct to the listing broker. The seller then faces paying a higher commission potentially (since co-broke) selling to you then if he/she sold to the direct buyer. You could of course choose to negotiate that if your brokerage allows.
I'm a realtor as well. All positives!!
really no meaningful negatives
It is easier being an investor/agent. I set my own appointments, negotiate my own deals, and own my own brokerage so I get all my commissions on top of it. Representing clients is only about 10% of my business so it is not my "job" but I do not take on clients that are looking in areas I am actively buying - just so I do not compete with my clients.
I have one negative. I had been marketing to various lists as an investor for about the last year. And I have about 3500 or so addresses that I've mailed to between 3-6 times.
Now that I'm licensed, if I want to mail to them, I have to cross-reference EVERY SINGLE ADDRESS with MLS to ensure they're not signed with an agent. This is a tremendous amount of tedious grunt work that I DIDN'T have to do before.
I certainly understand and appreciate that one shouldn't go "behind the sign" but this is a big negative in my opinion. This is even if I put the disclaimer of "Not meant to be a solicitation if you're already signed, etc," per my broker's instruction. Just my 2 cents.
If I'm missing something, let me know.
That must be a state specific law.
I can send out mailers as long as I can show the criteria I used to build the list was not to target active listings.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!