Should I get my real estate license

38 Replies

I just started researching in REI. I currently have a full time job that I love, however, after purchasing my first single family home I have become intrigued with REI. Is it possible to have a full time job as well as investing on the side? Would getting my real estate license benefit me with my REI? If I were to get my real estate license, do I have to be involved with a company or can I do it via freelance (if that is even a thing)? Any advise would be helpful. Thanks.

Start listening to the podcasts and you'll find that MANY of the investors out there are working a full time job. They will go in depth on how they pull it off and be very successful at investing too. 

http://www.biggerpockets.com/renewsblog/category/podcast/

I've been wondering if it would benefit me to get my real estate license as well. Learning all the ins and outs of making deals and being able to search the MLS to find properties would be a huge help.

@Kyle Gregg  and @Account Closed  , what would be the downsides of getting your license? I can't personally think of any beside the possibility of money lost because you are not a full time agent, but then you are learning something to use so it really wouldn't count as a lost. Just my two cents guys

So there you go bro, go for it. The class is like $200 at the community college. We spend $200 on stupid things all the time, well at least I do :-/

My partner retired before 30 as a REI, and he didn't have his license. It's not essential to become successful in RE investing, you just need to know a good agent.

Yes, definitely. I got my broker's license many years ago while working another full-time job and am very glad I got it back then. In most states, licensing requirements typically get more difficult and restrictive as time goes on. In MA, it's fairly easy to get a salesperson's license after taking 40 hours of state-approved training and passing an exam. But a broker's license now requires 40 more hours of state-approved training, at least three years of experience working with a broker's office (as a licensed salesperson, of course), and a passing grade on the broker's exam. Check with your state's licensing board to see your current requirements. The point I am trying to make is: the sooner you can get licensed, the better.

There are a lot of advantages. Training, particularly from the National Association of Realtors, is generally excellent. I took several CCIM (commercial real estate) courses and they were among the best, most useful, and profitable hours I have ever spent learning anything. Secondly, as a licensed agent or broker, you will likely be able to obtain an effective discount when buying or selling, particularly via the MLS. Thirdly, being in the industry, mingling with your colleagues, and doing deals as an agent or broker will give you a very different perspective about the real estate business that I think is difficult for a non-broker to appreciate or comprehend.

A downside I can think of is that once you are licensed, you will officially be considered to have "superior knowledge". For example, if you are acting as an investor (and not a broker), a court might take an especially dim view of your having directly purchased some widow's or elderly person's house for substantially under market. However, buying that same property for under market value if the person had a listing broker, bank, or lawyer involved might be a different story, because there is expertise available to them. It's good to note here that in all cases, full disclosure of your status as a broker or agent is a good thing and sometimes required by law.

Well, I wandered a bit, but, in summary...yes, I think getting licensed is a good thing on balance.

@Sebastian Konior It depend on which state you're in. In Illinois, if you want to work for yourself or be a broker in charge, you must obtain a Managing Broker License. To get one, you must 21 years old, have an active Illinois Real Estate License for 2 of the past 3 years, and complete a 165 hour course and take the exams.

So at first, yes you would have to, but prices usually run around $100-200 per month plus a commission of each transaction, but can vary greatly among different firms. So if I were you, I would go ahead and work on getting my Broker License and then start working for a RE firm. They usually provide training for new agents, because most of the Pre-licensing course involves Real Estate tax and law, rather than actually teaching you how to be an agent. Plus there are all of the networking benefits etc, etc. Then after you have your license for 2 years work on getting the Managing license allowing you to quite working for a firm, and also saving money. 

Im going through the same thing right now although I live in NC, I either have to work for a firm and pay monthly even when not pursuing deals, or complete three 30-hour post licensing courses as fast as possible to lift my provisional status. All together getting your license is definitely worth it, after only doing a deal or two per year you more than make up the cost of getting and keeping your license. 

@Account Closed  -  I have had my license for over 10 years, but when I worked in the corporate world I kept it at a holding company for like $100 a year and did not use it.  

I am a managing broker myself (no employees) and have found the independent brokerage companies charge little fees on top of your annual MLS access ($1k a year) When I first got licensed I joined Re/Max and think I paid $3000 just for the name and office space.

As far as doing REI while working.... it depends on what kind of REI. If you are planning on buy and hold I would encourage you to keep your job for awhile. Having a W-2 income is going to help you build your portfolio way faster than anything else. I did both for 3 years and probably could have still worked last year while I acquired 25 units, I just didn't need to anymore.

If you are looking at doing flips, I imagine hat is going to be harder while working.

Great information, I'm throwing around the ideas of a license as well.  A relator told me that if I had my license it would be considered an unfair advantage in some cases, preventing me from getting first dibs on a property.

Also what are the jurisdictions of a relators license, are the good for that state only or multiple? 

If it hold true to only that state, is there a way to transfer your license or are you stuck taking the class over again?

Just throwing out some thoughts and questions on the point, it seems like you will go through equivalent troubles obtaining your license or going through an agent...what do you guys think?

-Mean.Gene

@Brie Schmidt - I plan on doing buy and hold investing as of now. I listened to your podcast and it is quite inspiring! I know Chicago has a big renting community but do you believe that the northwest suburbs is a good market to get into as well? I am currently doing a lot of research right now but do you have any advise on a newbie like me trying to enter the world of REI?

@Eugene Moreau - I do not take on clients in a state I am currently buying in as to avoid competing with my clients. As a licensed agent, you are held to higher standards and must disclose your status in any situation that would give you an "unfair" advantage, ie buying a FSBO, ect

As far as the license, it is state specific.  If your state practices reciprocity with another state then all you need to do is take the test, but other states make you go through the education all over again.  

@Account Closed - I am not familiar with the burbs, sorry. As far as advice, keep your W-2 and buy what you can. I can't tell you how beneficial having a corporate job was to our growth. Also get really familiar with lending, know your DTI, know how underwriting is done. It will help you plan out your path, I am glad you liked the podcast!

getting your license is about the best thing you can do.  You run your own schedule looking at property and you write your own offers.  You are the decison maker why not get the access and get the commission kickback by being your own agent. 

I paid $2500 between classes and fees to get licensed. I continue to pay about $1500 a year to stay licensed, not including my time spent in continuing education and stuff. As a "side thing" its not the cheapest hobby but not the most expensive either. It's not a requirement for REI, but it's nice to have.

@Account Closed Getting a Real Estate License doesn't hurt, but it's not necessary. One of our partners is very successful in Real Estate & never had a license. He gained access to the MLS by becoming an assistant to the agents in the markets he worked. The costs to be an assistant varied by state. He was able to pull it off by being loyal to the agent that allowed him to be an assistant. Loyal meaning all deals he found via the MLS were submitted thru that agent. The agents loved it because they did not have to pull comps, run analysis..... just submit the offers.

@Account Closed   I wouldn't want to have a brand new agent that has never worked with investors before as my agent which is what you would have if you hired yourself.... I think it depends on what kind of investor you want to be.  If you want to shotgun a bunch of low ball offers then get a license. 

@Account Closed  

If you get a license, you will have to have an office hold it for you. This costs a monthly fee. There are also upfront fees required to become licensed. 

A disadvantage to being a licensed investor is that you must always disclose that you are one to the other party in a deal. Sometimes people take this as you are trying to pull one over on them because you have knowledge they don't. 

A major advantage is access to the MLS, but you can always get that through another Realtor.

I recommend you weigh the costs before deciding. Yo don't need a license to be a Real Estate Investor.

Best of luck!

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