Physical Therapist Assistant · Springfield, MO · Member since 2017 · 131 posts · 28 votes
I am looking to obtain my first investment property sometime within the next 6 months. I've already been through the process of making an offer, but I ended up backing out because the property was in a flood zone and I could not find insurance for a reasonable price.
During that process, and agent went with me to look at a handful of homes. He was friendly, but I always felt like I was a burden to him. Plus, I had to work with his schedule and wait until he could show me a home to look at it.
As such, I've considered getting my real estate license. So a couple questions:
1. Is it worth it for this purpose alone? For being able to show yourself properties?
2. Let's say that I wanted to actually sell a house here and a house there on the side, for supplemental income. Is this a feasible thing to do while also working a separate, full-time job? Or is being a real estate agent it's own full-time job? I would prefer to sell houses purely at my own discretion; maybe only for friends and whatnot. So can I do this? Or, do you have to actually work for an agency to be able to sell? How does this work?
Investor · Norman, OK · Member since 2017 · 101 posts · 34 votes
9y
@Lucas Mills We're in the same boat, as most work-a-holics are. What's the worst thing that will happen if you get your license for all the reasons you described above? You spent a little money, learned a few things, tested the water, and got access to MLS? Doesn't sound too terrible to me.
Real Estate Consultant · San Diego, CA · Member since 2012 · 44 posts · 13 votes
9y
If you are just looking to buy and hold you probably won't get enough value out of the license to justify the costs associated with keeping MLS access. If you are looking to be an agent on the side it can work, but probably only with friends and family, since the professional agents capture a big piece of that market. If you are looking to rehab properties a license can be invaluable. I use the MLS access to comp properties, write my own offers, and list my own properties.
I didn't consider it's value from the perspective of rehab. I think that could certainly be valuable to me, as I think I will need to pursue properties that need some degree of rehab in order to increase my profit/cash flow margins.
So, do I have to hang my license in an office somewhere in order to sell properties or even to access the MLS? What all does it take to sell properties as a real estate agent? For example, would I have to have office hours somewhere?
Real Estate Consultant · San Diego, CA · Member since 2012 · 44 posts · 13 votes
9y
I'm not 100% on Missouri law, but in the 4 states I've been licensed you will need to find a broker that will take your license. If you are a new agent they will probably take pretty decent cuts of your commission since they will have to show you the ins and outs of the paperwork.
Look for a broker with no desk fee if you plan to only do this part time. Other than that someone familiar with investments would be a better option than someone who focuses on regular buyers. The MLS access is separate from the actual brokerage, but you will need a license and a broker to get access in my experience.
If you want to be agent as a business/career be prepared to run it like a business. Hours on the phone prospecting, out meeting people face to face, networking. Take it serious and it can be a good business to be in. I never could do it personally. I couldn't handle the 'I like the house just don't like the color' crowd.
Physical Therapist Assistant · Springfield, MO · Member since 2017 · 131 posts · 28 votes
9y
Anyone know of a broker in/near Springfield, Missouri that fits this description? Someone that would take my license with no desk fee and let me be a real estate agent part time as desired?
Landlord/ Investor · Republic, MO · Member since 2015 · 41 posts · 30 votes
9y
There are quite a few in town that don't require a desk fee, but you will still have your GSBOR fees, SUPRA Fees, Annual MO license fees, etc.. Your cost per year will run $2,000 minimum even without the desk fees. That doesn't include your education and testing fees to get your license in the first place. If your new to the investment game, I would get your feet wet with an agent until your sure it's the path you want to take.
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
9y
not worth it, find a better matched realtor.
My realtor sends me every new foreclosure or cheap listing through email every night along with rental stats, rough ARV, other data, .......and the door codes.
This realtor would never show me a house though.
maybe you would want someone in between? You shouldn't have a realtor that makes you feel like a burden, you need to find a better match for what you're doing
I would love it if my realtor would do the exact same thing that yours does for you. All of the info sent each night, and door codes so I can show myself... That would be fantastic. That's really the primary motivation behind wanting to get my real estate license, so I can let myself into houses and not do it on someone else's time.
Flipper/Rehabber · Springfield, MO · Member since 2014 · 114 posts · 67 votes
9y
@Lucas Mills, I agree with @Brian Simmons. Getting your license has expenses that may not be necessary for your goals. There are PLENTY of realtors in the Springfield area that can help you find MLS properties that fit your description. You may also want to look for off market deals. You can find these yourself, from other investors, and local wholesalers. There is a local REI group that meets every month that would be a great place to network with all the above. Let me know if I can help you in anyway.
Real Estate Agent · Baltimore, MD · Member since 2017 · 36 posts · 36 votes
9y
@Lucas Mills@Alexander Felice - totally against the law, but I know of several agents that do it with trusted clients, mostly investors. I just finished my agent classes, passed half the test first time I took it, retaking the second portion in a week and it's totally for the reasons mentioned above by @Nicholas Kral - access to MLS, writing my own offers, listing my own properties, and the ability to enter any property whenever I see something I like or is of interest to me. As someone looking to rehab, it also comes in handy because you can increase your ask price by not collecting a commission when purchasing. I have no intentions of becoming a FT realtor, preferring to work with investors since I know how their minds work, but at the end of the day, we're all here to make money, so why not sell a few when the opportunity presents itself.
@Lucas Mills@Alexander Felice - totally against the law, but I know of several agents that do it with trusted clients, mostly investors. I just finished my agent classes, passed half the test first time I took it, retaking the second portion in a week and it's totally for the reasons mentioned above by @Nicholas Kral - access to MLS, writing my own offers, listing my own properties, and the ability to enter any property whenever I see something I like or is of interest to me. As someone looking to rehab, it also comes in handy because you can increase your ask price by not collecting a commission when purchasing. I have no intentions of becoming a FT realtor, preferring to work with investors since I know how their minds work, but at the end of the day, we're all here to make money, so why not sell a few when the opportunity presents itself.
The thought of spending $2,000+ per year to maintain a license is a tough pill to swallow, for me. I don't feel like I have a large enough network to feel confident in my ability to sell enough houses to even pay for the upkeep of my license fees, what with already having a full-time job, etc. Maybe it is more feasible than I think; I really have no idea. I guess that, worst case scenario, I could try it, and if it doesn't work, I'm only out 1.5k over the course of a year (while also having MLS access and the other perks that come with having a license during that year).
I feel like I am too much of a novice to accurately assess the risk vs. reward of getting my license. If the steep fees weren't associated, I would have no reservations whatsoever.
Real Estate Agent · Baltimore, MD · Member since 2017 · 36 posts · 36 votes
9y
@Lucas Mills - The thought of continuing to punch a clock for the next few years while I wait to save is a harder pill to swallow for me when I can see the way out. I don't expect things to go exactly according to plan, but I do believe that if I put the effort into all of this, I will see the benefits. It's flipping, selling whatever, whenever and just working hard at all of it. There's also the option of passing the test and having a broker hold your license. You won't have any of the benefits, but you won't accrue fees either and you could use the time to build your network. I say work within your comfort level, but don't get too comfortable. Fear can paralyze you, and no one wants that.
@Lucas Mills - The thought of continuing to punch a clock for the next few years while I wait to save is a harder pill to swallow for me when I can see the way out. I don't expect things to go exactly according to plan, but I do believe that if I put the effort into all of this, I will see the benefits. It's flipping, selling whatever, whenever and just working hard at all of it. There's also the option of passing the test and having a broker hold your license. You won't have any of the benefits, but you won't accrue fees either and you could use the time to build your network. I say work within your comfort level, but don't get too comfortable. Fear can paralyze you, and no one wants that.
If punching the clock means you have a steady income, as well as greater potential access to loans/financing, while simultaneously being able to pursue REI off the clock, then why not?
Most realtors don't make that much money, from what I've seen. But in terms of flipping, etc., can't you do that alongside a full-time job? Sure, you can't devote your full time to it, but if you're working on one house at a time, you either contract the rehab work out or go over and work yourself when you're not at your full-time job.
I prefer the safety, stability, and steady stream of income from maintaining my full-time job as opposed to the more immediate increase in freedom and autonomy from pursuing real estate full-time; at least, until I feel that I'm making enough from my investments that I can comfortably make the transition. In fact, I would probably fall flat on my face if I attempted that right now. But that's just me. Maybe you absolutely hated your job and so the risk is worth it to you? Maybe you have much more experience than I do and are more suited for this than I currently am.
@Lucas Mills@Alexander Felice - totally against the law, but I know of several agents that do it with trusted clients, mostly investors. I just finished my agent classes, passed half the test first time I took it, retaking the second portion in a week and it's totally for the reasons mentioned above by @Nicholas Kral - access to MLS, writing my own offers, listing my own properties, and the ability to enter any property whenever I see something I like or is of interest to me. As someone looking to rehab, it also comes in handy because you can increase your ask price by not collecting a commission when purchasing. I have no intentions of becoming a FT realtor, preferring to work with investors since I know how their minds work, but at the end of the day, we're all here to make money, so why not sell a few when the opportunity presents itself.
Paige, I'm not a big fan of most laws anyway so this is consistent with my personality ;)
Rental Property Investor · Pasadena, CA · Member since 2016 · 164 posts · 149 votes
9y
Lucas it doesnt sound like becoming an agent would be a benefit to you on your own projects. This is based on my assumption that you are new and not soing a large number of deals. The rehab stuff that was mentioned is more for a systemized business where you have a lot of activity otherwise the time and cost may not outweigh the benefits. Otherwise an agent can do most of the work, just have to find the right one. Of course you can succeed as a part time agent, and it may work out to sell friends/family houses. Just run some numbers.
Lucas it doesnt sound like becoming an agent would be a benefit to you on your own projects. This is based on my assumption that you are new and not soing a large number of deals. The rehab stuff that was mentioned is more for a systemized business where you have a lot of activity otherwise the time and cost may not outweigh the benefits. Otherwise an agent can do most of the work, just have to find the right one. Of course you can succeed as a part time agent, and it may work out to sell friends/family houses. Just run some numbers.
Good advice. I think you're right. I think I just need to find an agent who doesn't mind working with a new investor. I also just need to figure out all of the etiquette and nuances of the realtor/investor relationship so that I don't overstep my bounds.
For example, at some point, won't a realtor get tired of showing me houses which end up going nowhere? The one that I have been working with has shown me several, one of which I made an offer on and almost accepted. But, I ended up backing out because of the fact it was in a flood zone and insurance was too high. I felt kind of bad for having him show me these houses, only for it to end that way. Plus, the properties I was looking were not very expensive, so his incentive and potential commission are low.
Should I feel bad about this, or worry about this kind of thing? Is there some arbitrary number of properties that you can ask a realtor to show you before they get tired of an offer never or rarely being made? That has a lot to do with why I was originally interested in pursuing a license; so I could show myself all the properties I want without worrying about putting anyone out. Especially as I'm new and stil learning a lot; visiting properties and getting a feel for what I do and do not want in one is important for me.
Rental Property Investor · Pasadena, CA · Member since 2016 · 164 posts · 149 votes
9y
You have to understand, just as he agent does, that buying a house is a process, sometimes a long one. If the agent is willing to continue showing you places, they've already determined you are not wasting their time. At the point you are wasting their time, they will tell you and you should expect this of them. Dont let your mind create fear where it doesnt exist. At first i would trust your judgment in your process when looking for a house, but maybe after 3-5 agents stop the relationship, then you may want to look at what you are doing, cuz maybe you are just wasting time or dont have a focused enough strategy.
Just be clear with the agent upfront so they can set expectations and fairly decide if they want to work with you. If you are just casually looking, don't act like you know what you are looking for and are willing/able to pull the trigger soon. Only feel bad if you lie or put up a front, otherwise dont worry.
You have to understand, just as he agent does, that buying a house is a process, sometimes a long one. If the agent is willing to continue showing you places, they've already determined you are not wasting their time. At the point you are wasting their time, they will tell you and you should expect this of them. Dont let your mind create fear where it doesnt exist. At first i would trust your judgment in your process when looking for a house, but maybe after 3-5 agents stop the relationship, then you may want to look at what you are doing, cuz maybe you are just wasting time or dont have a focused enough strategy.
Just be clear with the agent upfront so they can set expectations and fairly decide if they want to work with you. If you are just casually looking, don't act like you know what you are looking for and are willing/able to pull the trigger soon. Only feel bad if you lie or put up a front, otherwise dont worry.
I think I just tend to worry to much about wasting other people's time. Clearly, I am serious, as evidenced by the fact that I put in an offer on a duplex and was quite ready to pull the trigger. I think he understands where I'm coming from and what I'm doing. I just don't want to be a burden on someone else.
Rental Property Investor · Pasadena, CA · Member since 2016 · 164 posts · 149 votes
9y
Most people don't want to be a burden on someone else, but there is a huge difference in thinking you are a burden and actually being one. Once you become one, you will know it based on the other person's response, not your own.
Investor · Norman, OK · Member since 2017 · 101 posts · 34 votes
9y
@Lucas Mills We're in the same boat, as most work-a-holics are. What's the worst thing that will happen if you get your license for all the reasons you described above? You spent a little money, learned a few things, tested the water, and got access to MLS? Doesn't sound too terrible to me.
Real Estate Agent · Baltimore, MD · Member since 2017 · 36 posts · 36 votes
9y
@Lucas Mills I think it's exactly as you stated, all depends on how much time you plan on devoting to this. I don't want to flip in addition to a FT job, lol. I'm looking to leave my FT and make REI my FT. I want to flip multiple houses at one time which means multiple offers on a regular basis, and quite frankly I don't believe there's an agent out here that's going to work as hard for me, as me! I don't hate my job, but I have been researching, testing the REI waters for some time now. My initial plan was to play it a tad safer, keep the steady income for another year or so, but I've met some great people these past few months willing to mentor me in both the agent and investment areas which gives me the confidence to step out on a little more than blind faith and give it a go. Besides, the risks make like worth living . . .
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
9y
Get the license. If you don't want to do any Realtor work (or not much), you don't have to. Refer your Realtor leads to a Realtor in your office who has a history of success and make referral commissions. In my area, referral commissions run 25% of the side (for example, 25% of 3% and then split that with the broker). You do the math, but you can earn hundreds (or maybe thousands) of dollars per hour by making referrals on the side. You will have about 2-3K per year in expenses, but you can easily make that up and more with referrals and by selectively working with friends and family.
Investor · Springfield, MO · Member since 2016 · 2 posts · 1 vote
9y
I am a licensed realtor here in Springfield and I got my license about a year ago in order to look for my own deals as well. It can work out well however it is not a necessity. I do single family home rehab and it allows me to list my own houses thereby saving me half the commissions. Also holding a license dose allow you to do your own CMA's which can save alot of time.
As @Brian Simmons said tho it is rather pricey and I wouldn't recommend that a new investor start by getting licensed until you know precisely what you want your investment business to look like. For example ,buy and hold, fix and flip , how much volume do you intend to do, etc.
MLS is currently a super competitive platform and as @Andrew Newlon said off market deals can often be a more reliable place to find great investments.
All in all I would say the best thing for investors in our market is to come and meet up with us at our local REI. I met both Andrew and Brian there and have learned a TON from them both.