Coon Rapids, MN · Member since 2015 · 67 posts · 23 votes
I'm reading the book, the book on flipping houses and the author recommends getting my real estate lisence. I haven't done any deals yet but think I have 3 options to help me do my first deal this year. Would you recommend that I get my license? What are some pros and cons? More money, more knowledge, and access to the MLS are some of the obvious pros. I'm not looking to replace my job to be a real estate agent and with all the paperwork that was required to buy my current home, how do you know you're doing it right when you don't work for real estate company? Thanks in advance.
Investor · Boston, MA · Member since 2015 · 95 posts · 32 votes
10y
in my opinion everyone that invests should have their licenses. It only makes sense to and I don't understand the thought process of anyone that says otherwise. You have way more control over the data you receive/access and can submit offers way more efficiently. Not to mention you receive your commission on deals. Would love to hear opinions on why not to from other BP members. Have a great 2016! Much success!!!
Investor · Boston, MA · Member since 2015 · 95 posts · 32 votes
10y
in my opinion everyone that invests should have their licenses. It only makes sense to and I don't understand the thought process of anyone that says otherwise. You have way more control over the data you receive/access and can submit offers way more efficiently. Not to mention you receive your commission on deals. Would love to hear opinions on why not to from other BP members. Have a great 2016! Much success!!!
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
10y
For me it depends on what your goals are. Lots of continuing ed, fees and disclosures needed when you're licensed. Here the MLS is pretty much worthless for deals, so having access to it doesn't do much for me.
I did the ed requirements and passed the test a few years ago but decided not to get licensed. My goal was to establish a decent PM co around here (already had one I manage my own portfolio with) and I was backed by a local designated agency broker/owner who would have referred her clients to me. Once I saw all my owner clients would be the property of the agency, I declined. Would have also had to name it something else and answer to her and the DOL. May as well return to my cubicle.
Others have done very well being licensed. Don't expect much of an investor education in the study course. Again, depends on your goals and purpose for doing it @Rob Grove!
Ottawa, Ontario · Member since 2015 · 30 posts · 5 votes
10y
In Ontario Canada at least, we have to go to OREA (Ontario Real Estate Agency) for the courses. There are 3 main ones, for a total cost of $1820. You have 18 months to complete all 3. Then there are 3 Articling course that are also required with a 2 year timeframe for completion.
Then there are various fees for different agencies that are required. I had a coffee chat with one of the Real Estate companies here in Ottawa. He went over all the info regarding getting a license, plus he provided me with a booklet that outlined ALL the required fees after you get your license. Plus the commission is divided amongst you, the broker and other places.
So, IMHO, while it can be a good thing to have, the initial outlay of funds before you even make your first deal maybe a little difficult to obtain in the beginning. If it is not required where you live then maybe hold off, at least until you can get your first deal closed and get the funds generated from that deal.
Though not as plentiful as in the U.S.A., you are starting to see discount / flat-fee brokerages here in Canada. If you plan to use your real estate licence primarily (or solely) for your own investing, finding such a brokerage at which to hang your licence would be beneficial.
Frisco, TX · Member since 2015 · 24 posts · 1 vote
10y
I'm also new to real estate investing, and in the process of getting my license. I think it will very beneficial in so many ways, having the freedom to look at for sale houses on your own time, being able to do your own research, getting/cutting on commissions, etc. Good luck!
Some folk believe there are tax implications when being a realtor and flipping houses, even on a limited part time bases. I would do some research. I know a realtor who treats his flips as ordinary income because his CPA told him real estate is his profession. He only does about 1 to 2 deals a year. Some of the CPAs on this site believe at that level you could treat them as short or long term gains. Something to consider.
There is certainly in increased risk of liability to the party you are selling/buying with.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
Studying real estate will expose you to how much there is to know. It can be overwhelming.
While the courses will only scratch the surface and not really prepare to make money, passing the test will demonstrate that you can study and at least be familiar with fundamentals.
While you may never correctly spell the word "license" you may become incredibly effective and a smart operator. I first passed the CA sales 'agent' exam in 1978 but only did deals for my own account and never did work as an agent for a brokerage.
The great majority of people who post on BP will never take substantive action, never get their license, never do a deal and sadly, never prosper. Studying for and obtaining your license will set you apart from a great many others and show that you can complete something you start.
If you are successful in real estate, do what others will not do for five years, you will be able to what other cannot ever do for the rest of your life.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
@Roy N. I'd prefer to blame my iPad spell check but I'll blame on posting before second cup of coffee. People who live in glass houses... My error. Thanks for catching.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
10y
@Rick H. ... just a friendly chain tug. My fingers and brain frequently find themselves out of consensus on 'advice' and 'advise', 'licence' and 'license' amongst others.
Studying real estate will expose you to how much there is to know. It can be overwhelming.
While the courses will only scratch the surface and not really prepare to make money, passing the test will demonstrate that you can study and at least be familiar with fundamentals.
While you may never correctly spell the word "license" you may become incredibly effective and a smart operator. I first passed the CA sales 'agent' exam in 1978 but only did deals for my own account and never did work as an agent for a brokerage.
The great majority of people who post on BP will never take substantive action, never get their license, never do a deal and sadly, never prosper. Studying for and obtaining your license will set you apart from a great many others and show that you can complete something you start.
How embarrassing. Not only did I misspell license once but a few times... I'm gonna blame it on my phone...
Nonetheless, I made it through college with the GI Bill to get the piece of paper, because I knew it would help me make more money and it was the right thing to do when I got out of the service. My main take away from college was, if you want to make more money, you need to jump jobs. I've been working a 9-5 again for just over a year and I would rather be working for myself doing real estate investments.
I plan on making some sort of deal happen this year, not quite sure how I am going to make it happen but I will. Currently, I use zillow to do my research but I know it's not accurate and is missing a lot of the key information that the MLS has. Even when I bought my current residence, with what little a access I had to the MLS, I knew I was going to have instant equity with some cosmetic upgrades to my home.
Right now I am leaning towards making the commitment. Like you said, it will only scratch the surface, but I think will help me in a variety of ways which will pay for itself in the long run. Plus, I am one of those people who doesn't like to, "not know" things and I like understand the process. When I bought my home, I didn't quite feel as in control as I wanted too.
Investor · Cincinnati, OH · Member since 2015 · 23 posts · 2 votes
10y
I thought about getting my license a couple months ago, but through some research, came upon this information:
1. Just because you have your RE license DOES NOT mean you can collect commissions. You have to be employed by a realtor company, like Comey shephard or Sibcy cline or whatever it may be. You can't just be the guy who has a full time job in another field, get your license, and have all the advantages of a realtor.
2. Just because you have your RE license DOES NOT give you access to MLS. It's expensive, AND I was told by another source that again you need to be part of a realtor company to get this access.
So for these two reasons, I decided not to pursue it. Would love to hear what some of the experiences folks on this site have to say about these 2 points. If I was misled, would love to know now rather than in 5 years.
I thought about getting my license a couple months ago, but through some research, came upon this information:
1. Just because you have your RE license DOES NOT mean you can collect commissions. You have to be employed by a realtor company, like Comey shephard or Sibcy cline or whatever it may be. You can't just be the guy who has a full time job in another field, get your license, and have all the advantages of a realtor.
2. Just because you have your RE license DOES NOT give you access to MLS. It's expensive, AND I was told by another source that again you need to be part of a realtor company to get this access.
So for these two reasons, I decided not to pursue it. Would love to hear what some of the experiences folks on this site have to say about these 2 points. If I was misled, would love to know now rather than in 5 years.
thanks.
If you're looking for reasons NOT to do something, you'll have no problem finding them. Perhaps hundreds of reasons not to take action.
Obtaining your real estate license will not prepare you to find deals, make deals or make money in the real estate business. And it certainly won't prepare in any way to be an investor.
So the challenge becomes, 'just how does someone become educated about real estate?'
The shortfall that most info product marketing promoters don't warn you us that there are a lot of very basic, foundational aspects of real estate that are, admittedly not exciting, but essential and necessary. Things like theory, title, escrow, valuation, taxation, financing, possession, legal aspects, business models, leverage, etc.
If you can learn these independently, more power to you. There are people who study law independly, take the LSAT's and pass the Bar exam, too. I'm just not that smart, organized or disciplined to do that.
For those that are smart enough or believe fish will jump into the boat, my hat is off to you. I'd rather take the easy path to knowledge.and do deals and make--not lose--money.
Real Estate Agent · San Jose, CA · Member since 2015 · 84 posts · 50 votes
10y
Rob,
I would start with asking yourself a few questions. What are your goals in real estate? What are your talents and gifts and how do you plan to use those to be a successful real estate agent or investor? What excites you about doing real estate deals and transactions ? Are you looking to buy wholesale and do flips or buy and hold? Are you looking to help friends and family buy and sell real estate?
You also might consider doing the "Franklin" method of decision making. Take a blank piece of paper and draw a line down the middle. On the top left put PROS, on the top right of the CONS. Then spend some time writing out what you see as the advantages (Pros) or disadvantages ( Cons) of getting your real estate licence. Alot of people on BP have provided some good information for you sift through and generate some ideas and hopefully some goals. Do this exercise over a period of a week or so. If you write down 15 pros and only 3 cons ......that should tell you something.
My vote would be to get licenced. If you do one deal a year it's worth the expense of holding a licence. Plus once licenced you then have the option to find and join the office of a good broker/investor, who can mentor you. Yes, as a licenced agent, you have to be very careful around disclosures, reports and making sure you do your due diligence. Yes, you are held to a higher standard in a court of law. But, being an agent can give you a deeper understanding of contracts, how to generate real estate leads and most importantly, in my opinion, finding out about off market deals before they hit the MLS.
Coon Rapids, MN · Member since 2015 · 67 posts · 23 votes
10y
My main goal was to gain access to the MLS so I can do my own Market Research and have real time access what's on the market. From what I have found with what little research and phone calls I have made, a for sale sign or real estate website, doesn't tell you what is going on. For example, a duplex by where I used to live had a for sale sign in the yard, when I went to the Real Estate company's website, it didn't say it was pending, so I called the agent and it had been in Pending Status for several months.
A few pros that I came up with
-Access to the MLS
-If I can sell a few deals to make some extra cash to help me invest it's a win.
-Networking
-Getting actual experience in Real Estate even if it's not investing at first.
-Not that I want to be a Full Time RE Agent but I am pretty good at sales.
-saving on Sales Commission when I do my own deals
-Not really a pro but I am used to being held at a higher standard and am ethical. I wouldn't want to get over on someone to make a buck.
-knowing what sells and what doesn't
-knowing how the current market is.
-being able to see seasonal trends
Cons:
-Unsure about the requirements to keep my license. Do I have to be a pt REA and do Brokers even hire PT REA and if so, what are their sales requirements and/or fees.
-If I start doing pt RE Sales, listening to my wife complain that I am gone more.
-Potentially two jobs (even though I want to flip houses but the payoff would be better than a commission check.)
Coon Rapids, MN · Member since 2015 · 67 posts · 23 votes
10y
@Rick H. I talked to my realtor about local laws and requirements and found out there is a bunch of fees required to be part of a brokerage. Nonetheless,I have an appointment Wednesday to talk to their business development coach. Seems like this brokerage offers tons of training which is nice. I'm determined to make money this year in this industry!
@Rick H. I talked to my realtor about local laws and requirements and found out there is a bunch of fees required to be part of a brokerage. Nonetheless,I have an appointment Wednesday to talk to their business development coach. Seems like this brokerage offers tons of training which is nice. I'm determined to make money this year in this industry!
@Rob Grove How did your appointment go with the business development coach? Have you decided to pursue becoming an agent?
Coon Rapids, MN · Member since 2015 · 67 posts · 23 votes
10y
@Anthony Buxengard for right now, I chose not too. Mainly because I want to focus my energy and resources on wholesaling. When time and $ permits, I'll get it. Everyone's situation is different though.