Newbies-Getting A RE License Is Very Beneficial
Hello BP Community,
I wanted to take the time to speak to a lot of the newer investors that come through the site looking and trying to figure out which is the best way to start out in this business. You will hear wholesaling thrown around a lot as a quick and easy way to get started, and though I do not totally disagree with that, I wanted to write this post to give my advice on why I feel getting a RE license would be a much more beneficial way of starting out.
To start, I officially started my RE career a little over a year ago, and I decided that I wanted to start out by flipping a property. I mean, I can speak to a lot of the people here on the site when I say watching the HGTV shows really played a major part in me wanting to start of that way. It looked fun, they made lots of money, and on tv it "appeared" to be so easy. In reality, its not very "easy" at all. Im sure as you get more experience doing it and get a better understanding of the process, then it can sometimes flow more smoothly, but I think its safe to say that its not realistic to categorize it as being "easy". I learned the hard way by purchasing a property when we were having one of the worst winters in Chicago history, stupid polar vortex lol, and that made things very hard for me. I can say though that it taught me so much by me "learning on the fly", but I can honestly say that is not the way you want to learn, and a lot of times in wholesaling thats what you are doing unfortunately. "Learning on the fly" can cost you lots of money, and it can sometimes hurt so bad that it really destroys you financially; I was fortunate enough that didn't happen to me though. I actually turned a profit out of that terrible situation that seemed so stressful at the time, and it introduced me to the strategy of wholesaling, but it was very scary at the time not knowing how to deal with that situation.
While I was sitting on that property, it was costing me lots of money. I had my carrying costs that were associated with the property, which weren't a bunch of money, but when factoring in that I had my own expenses associated with my own residence and a family to take care of, it was a lot and it had gotten very stressful. The property needed a full gut, and also a new roof. The fact that we were experiencing consistent (-10) below temps and had about a couple of feet of snow on the roof and around the property, made it very difficult for my contractors to get started. During this time though, I started listening to different podcasts on the topic of wholesaling, and I figured I'd take this approach and just get rid of the property. First off, I was pretty aggressive in my ARV and chose some very "questionable" comps that I was basing my resale value off of. This was one of the many mistakes that could have been avoided had I taken the RE course and getting better training prior to getting into this project. The property was still a pretty decent deal, so I still had the potential to get rid of it. I also wasted lots of time running back and forth doing showings to people who were a lot of times just "tire kickers" and had no intention of purchasing the property. At my current brokerage, one of my trainers really emphasized how to prescreen potential buyers, and he showed me how to prevent from getting my time wasted like that. I actually had another "real world" experience with that again on another deal I did in the past, so what he taught me really reinforced that.
I'm not going to go into the long drawn out details of that first deal, that is not the intent of me writing this post. I just wanted to share that taking the RE course, and now going through training at my new brokerage, I am learning so much vital information to the whole real estate transaction, and the industry as a whole. I have learned about different niches within the industry that I was not even familiar with. I have done a few investment deals, and just thinking back on some of the things I did wrong, I see now that taking not only the course, but reinforcing what I learned in the course with the training could've prevented a lot of those mistakes from taking place. Taking the RE course taught me a lot, but a lot of that stuff I forgot once I took the exam. Getting with a brokerage that will help train you in different areas where you are weak is so beneficial in my opinion to helping you to become a better investor. There is also the potential to create other streams of income as well. I am learning how to develop a different branch within my company to help people lease their properties, and help people buy and sell their homes the traditional way. This is all in addition to what I do as an investor. There are so many people that think investing is the only way to get into this field, but thats not the case. There are several other areas you can focus on and make good money doing if you're ambitious and disciplined enough to follow through on them. If you use some of those fields to get your foot in the door, then you will naturally learn the investing side of the business and can pursue that as well and be more informed doing so.
I will conclude by saying this. I want to encourage newer investors, or people who are stuck as to where to start, to go get their license and invest the time into taking some of the training courses that your broker can provide. No, not everyone needs to take this route. I know several investors who are very successful and have never pursued a license. I just feel taking this approach will help you to be more independent and not have to depend on other agents to do things you can do yourself, and you will have a legal right to do so. It also will help you to learn different facets of the business that can keep you out of legal trouble as well, among many other things. I am learning a lot right now-on both the investor side and broker side, and its exciting enough that I thought I'd share it with you all. Taking these measures won't be a recipe for "knowing everything", but it does help in teaching you some very vital information that will be beneficial to you as you grow in this industry. Hope this was helpful. God bless, and best wishes to everyone.