Investor · Fuquay Varina, NC · Member since 2016 · 10 posts · 2 votes
Hello :)
I am an entrepreneur in the Raleigh area and I am new to the REI world. I am learning a lot and I love it. I feel like I should get my RE license just to know that side of the business but I have no desire to sell homes, it would just be to learn the laws and have access to the MLS listings. I know I don't need it to be an investor but do you think it really helps to have it? My main business takes up most of my time so I don't want to take on this new license unless it's really necessary and worth my time.
What do you think?
Investor · Livingston, MT · Member since 2016 · 16 posts · 16 votes
9y
No. Not worth it, not necessary . Find an established , reputable agent who understands the business that you want to pursue and make them a part of your team just the same as an accountant or attorney . You should be focused on analyzing and funding deals, not worrying about contracting and scheduling. Best, Brian
Investor · Apex, NC · Member since 2014 · 340 posts · 188 votes
9y
Nicole Lorenzetti I don't think it's completely necessary in the beginning stages of REI. I personally think it's worth it to have, but only if you plan to use it to its full potential. Otherwise, you're just spending a bunch of cash every year to check out properties you can probably view on Redfin/Zillow. I have one but it's a valuable part of my business
Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
9y
@Nicole Lorenzetti I agree with the statements of @Uriah D. - as it will cost you time and money to get your license, more time and money to keep it each year, and you then have to hang it somewhere, which will also likely have some cost. You will learn a lot in this process, but if you have no plans to use it for more than the learning experience and MLS access, you can do both of those things in other and easier / cheaper ways.
I do have my license, but like Uriah, it has factored greatly into my business model, and will even more so as I progress.
Investor · Livingston, MT · Member since 2016 · 16 posts · 16 votes
9y
No. Not worth it, not necessary . Find an established , reputable agent who understands the business that you want to pursue and make them a part of your team just the same as an accountant or attorney . You should be focused on analyzing and funding deals, not worrying about contracting and scheduling. Best, Brian
Raleigh, NC · Member since 2015 · 30 posts · 14 votes
9y
@Nicole Lorenzetti don't bother with getting your license if you solely plan to invest in buy and hold and you don't plan to self manage. If you start flipping, it would be worth the effort though, because most agents are not investor friendly for flip deals due to the volume of work with very little reward. Most flippers offer many lowball offers and drawing up those offers takes time with the expectation of a lot of rejections. As a flipper, you'll also save on commissions. However, for buy and hold deals, use a licensed broker/realtor and a local management firm and don't bother with the license. I recommend investing closer into to Raleigh from Fuquay Varina though. Look into Raleigh, Cary, Apex, Holly Sprongs (wake county), Morrisville, Chapel Hill, Durham, Clayton, and Garner. Pittsboro is really good if you're in it for the appreciation speculation. That's going to be the next boom in this area.
Rental Property Investor · Albuquerque, NM · Member since 2015 · 39 posts · 48 votes
9y
Find an investor agent that you can work with. Bring loyalty to the relationship and get knowledgeable. Use him/her to help you find deals and save $$$$. Costs you $0 to use services of a broker unless you are selling.
I agree that it is not worth your time. One thing you have to take in to account is once you become a licensed agent there are additional rules you have to learn and follow so you don't get your license revoked, i.e. marketing guidelines, disclosure during purchase, etc. If you're not interested in taking on the learning curve then it's definitely not worth it. However, if you plan on buying a lot of properties, the commission will improve your ROI.
Investor · Fuquay Varina, NC · Member since 2016 · 10 posts · 2 votes
9y
Thank you all so much for the insight! I definitely want to flip, invest and hold. I will hold off on it for now and possibly get it later. Scaling my current business is my main priority right now, so I don't need the stress of maintaining the RE license at this time. I have relationships with some great agents, so will go from there :)
Nicole Lorenzetti I don't think it's completely necessary in the beginning stages of REI. I personally think it's worth it to have, but only if you plan to use it to its full potential. Otherwise, you're just spending a bunch of cash every year to check out properties you can probably view on Redfin/Zillow. I have one but it's a valuable part of my business
BTW, Was at the meet up in Raleigh the other day and I am following you and your wife's journey! See you again soon :)
Investor · Fuquay Varina, NC · Member since 2016 · 10 posts · 2 votes
9y
Originally posted by @Account Closed:
@Nicole Lorenzetti don't bother with getting your license if you solely plan to invest in buy and hold and you don't plan to self manage. If you start flipping, it would be worth the effort though, because most agents are not investor friendly for flip deals due to the volume of work with very little reward. Most flippers offer many lowball offers and drawing up those offers takes time with the expectation of a lot of rejections. As a flipper, you'll also save on commissions. However, for buy and hold deals, use a licensed broker/realtor and a local management firm and don't bother with the license. I recommend investing closer into to Raleigh from Fuquay Varina though. Look into Raleigh, Cary, Apex, Holly Sprongs (wake county), Morrisville, Chapel Hill, Durham, Clayton, and Garner. Pittsboro is really good if you're in it for the appreciation speculation. That's going to be the next boom in this area.
Really? Fuquay seems to be booming, No? My agent friend definitely has her eye on Pittsboro, RTP is moving that way! Thanks for your help :)
Real Estate Agent · Falls Church · Member since 2012 · 2k+ posts · 1k+ votes
9y
@Nicole Lorenzetti I feel that if you do not have a desire to help people once licensed, it will not be very valuable to you. There are much less expensive ways to get access to information from the MLS
Damascus, OR · Member since 2016 · 87 posts · 24 votes
9y
I was thinking the same thing Nicole Lorenzetti but I also didn't want to sell/show houses. I have an awesome agent that is such a go-getter that she views homes for me while I'm here in CA.
Investor · Tampa, FL · Member since 2016 · 51 posts · 13 votes
9y
Nicole Lorenzetti I'm in a similar situation looking to buy and hold or fixing and flip. But I decided to get my license for a few reasons: education, MLS access, expand my network, and of course save on commissions. Everyone made great points above but at the end of the day it comes down to what makes sense for your situation.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
I have a definite bias in that I think a real estate license is an integral part of anyone who wants to really make it in this industry...
I don't use mine for retail sales but it puts me in the game... I will make more just on simple referral fee's than many w 2 workers do in a year and I mean simple ... one phone call or e mail and bam 5 to 10k in referral fee's from someone around the country.
Its critical and necessary if your going to flip.. you want to list your own homes.. 24/7 access to MLS is also critical.
All those that think the regulations or disclosure hamper you.. that may be true if your ripping off little old ladies but if your just doing business its no hindrance... you simply disclose I have been buying distressed assets for over 40 years as a licensed broker.. never once had an issue.
and for those that think it cost too much money that's a joke if you cant afford a few grand a year for your license then your not really making any dough anyway..
Real Estate Agent · Bowie, MD · Member since 2015 · 8 posts · 0 votes
9y
I agree with many of the views in here; if you aren't going to use it much and it isn't central to your business plan, it may do more harm than good. There were great points about referral fees that you are only able to receive if you are licensed as well as 24/7 access to the MLS. IMHO, it makes you more flexible and useful to others; at the end of the day, being useful for others is a great way to increase your network and call upon others when you need it.
That said, there will be a ton of costs; license upkeep, association dues, broker dues, continuing education, etc. Don't be surprised to end up with a $1000+ bill annually.
Investor · Mountain View, CA · Member since 2014 · 120 posts · 51 votes
9y
I've been an investor first, and now I'm also a RE Agent. I joined because I was doing fairly well as an investor, am primarily interested in buy and hold deals, and was frustrated at the general poor quality of agents in my area for my price range. This is for both Retail and Investing. I won't go into the details in this response but it's safe to say that many of them did not seem to understand the areas, the schools, or basic finances. Or, more frequently than not, they would want to "upsell" me to things that were easily $500k above my cap, also known as total time wasters.
I knew that I could do it better, and really focus on servicing a select number of clients, and specifically, other investors.
There are a _LOT_ of 'hidden' costs associated with being an Agent and other not-so-obvious requirements.
I'll be more specific than everyone else here so you can really make that decision for yourself.
In CA, there is a 2 year requirement to work with a Broker before you can get a Broker's license - there isn't really any way around it at this point. So if you're an investor, be prepared to join someone else's firm for 2 years. Question 1 for yourself: Do you want to do that?
Here are some costs associated with being an agent:
E&O insurance (can run anywhere from $150+ monthly)
desk fees (depending on the brokerage, some may charge "desk fees")
rev split - when you join a brokerage, they get some % of what you sell - even if you don't sell, you may still pay desk / E&O / Office fees
the test, materials - $600 all in
fees to be part of the Real Estate Board - ~$1000/annual
fees for MLS - ~$800/annual
fees for key entry (can't remember how much this runs)
So all in, if you do zero business, and close zero deals, you'll be out roughly $4k for the first year, and roughly the same for every year following. Question 2 for yourself: Now that you have the numbers, will the numbers really work out?
Let's say that you decide to get the license, and you start ramping up on deals. You may find that you only have 24 hours in a day, and once you have 3 concurrent deals, you won't have the time to find the other deal. So here's Question 3: Realistically, if you want to scale, do you think you can do it without a team?
I realized that I wanted to get my license so I can augment a team. I've worked on a lot of massive projects and have been humbled time and time again with the sheer number of people that it takes to get big things off the ground with any sense of velocity. As a result, I'm bringing that mindset to RE as well, spending the time to meet the 'right' investors to work with as an agent, or the 'right' flippers to do hard money loans, or the 'right' partners for any other type of investing.
I see a lot of people going at it alone, or with their significant other (possible recipe for divorce if you're not both on the same page btw). People make it happen for sure, but I've personally have found that working with a solid team delivers much better results and there is a lot to be said for the ability to divide and conquer.
Now, of course, if you find that you don't enjoy working on a team, then that really trumps everything I've noted above. Because if you don't like working on a team, then it's highly likely that others will also not enjoy working with you. So here's the final question: Are you easy to work with? You can define that in any way you wish, but the sooner you can be honest about that answer, the quicker you'll come to a decision. If you're not easy to work with, then you'll do yourself, and any potential agents, contractors, etc. a huge service by getting your license so it's not a waste of everyone's time.
Most agents hate working with investors because there are a lot of "investors" out there who just talk about investing, but have no track record of investing, or burn through their potential partners. Then they complain about how everyone else sucks.
People love to say how terrible their agents are (re-read my first comment for proof) but may not be aware of what's really involved. Let's just say that I have a much better appreciation of the good agents now that I am one.
Bordentown, NJ · Member since 2015 · 15 posts · 0 votes
9y
great post Mimi! Gave me a lot to think about as I'm still learning about REI here in NJ. I didn't expect the annual costs of being an realtor was close to $4000/yr. It pays for itself if you are out there working deals though.
Does anyone know how the "trend assistant" role works with gaining access to the MLS? I heard that mentioned the other night at an REIA meeting as a way to get around getting licensed to gain MLS access.
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
9y
Nicole,
This question comes up all of the time. I think there are advantages and disadvantages on both sides. There is nothing wrong with getting your RE License but it certainly is not necessary.
Advantages
You can go look at listed properties when they first hit the market. You will learn a great deal regarding property rights and other things that are not necessarily taught. Don't let people tell you, you cannot find properties on the MLS. The majority of my buy and hold properties are from the MLS.
Disadvantages
You will need to disclose you are an agent when you make offers and are talking to other agents. You will also need to pay for your license and find time to meet the continuing education requirements i.e., hours. This will take time and money.
If you have an agent you are working with and you have a great relationship I don't think its necessary. It will not hinder you.
Investor · Ventnor City, NJ · Member since 2016 · 41 posts · 34 votes
9y
Not sure what a "trend assistant" is. Never heard that term, but I worked as a unlicense assistant, licensed assistant, agent and broker. The assistant is in the MLS constantly. depending on your MLS, an assistant can have their own login with 24 hours access, or has to login in with their agents credentials and only one person can be in it at one time.
In both situations, you have to actually work for an agent or brokerage, so unless you choose that profession.
I do know agents who, against regs, would share their MLS login with select clients. it's just best to have a good agent who will set you up on auto searches-- as many different ones as you want. Make sure they send you the Full or Agent Report.
Investor · Mountain View, CA · Member since 2014 · 120 posts · 51 votes
9y
@Evan R. you'd definitely want to check with your state to see where your state falls in the way of fees - it was a surprise for me since the info wasn't readily available.
One of the biggest disadvantages would be that it becomes more of a time sap then a cost savings, especially if your state has the requirement to hang your shingle with a brokerage. Don't get me wrong. I love the brokerage that I'm part of it, but I wanted to be in the business, it was the logical next step. Plus, I was seeing a lot of deals that were coming on the market that would be great for flippers, not so much for me.
Still, it surprises me that every single time this question comes up, no one ever provides actual numbers. Hopefully everyone doesn't run their investments in the same way.
Investor · Mountain View, CA · Member since 2014 · 120 posts · 51 votes
9y
@Jay Hinrichs great to see you again on this post, it's been a little while :)
Great, thanks for the clarification. I was under the impression that that was the case but hadn't really looked into it for outside of CA. Also, Keller has a very different engagement model / rev share model than most. I interviewed a number of firms before I went with Keller - each brokerage is very different, for sure. And yes, you should be bringing in commission income (aka treating it like a job because, it is! :D ).
Jay, would be curious to hear about your path if you're willing to share? I've read your profile but curious to know what's driven the choices that you'd made (opportunity? or something else?).
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Mimi H. I go with what is hot... or try to anyways.. and I don't get stuck on one region.
Although if hindsight was 20/20 I would have done nothing more than amassed rentals in Santa Clara county... would never have sold the 3 homes I owned in Palo Alto... etc etc..
Investor · Mountain View, CA · Member since 2014 · 120 posts · 51 votes
9y
@Jay Hinrichs oh boy, my stomach fell into the pits just reading that but yes, never look back. Markets can't really be predicted. Wish I'd bought when I first move to the Bay Area in 99 but ah well...
If it makes you feel any better, Mtv View just passed Measure V - rent control maxed out at 5% increase annual.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Mimi H. I passed on buy Mccuen condos in 1979 for 5k a door.. rents were 250 .... whole santa clara 4 plex for 20k.... I could have just started stacking those up...
I bought homes in E PA for under 10k each.. WAR zone in those days... My PA homes I bought for under 200k each.... so yes .... can't cry in our milk no one cares..
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