Howdy BP Community! I'm a beginning investor trying to house hack here in the best state in the country TEXAS. Sorry California, New York and Florida but you can't compete where you don't compare... ;) My question is an age old question that has haunted the REI community for many millennia... Should I get my real estate license or not to be a real estate investor? Agents aren't very investor friendly for the most part(thank you for those of you that are you are a blessing) and usually aren't going to want to go out on a Saturday or Sunday to look at a 150k investment property that you are considering. I completely understand why and try and put myself in their shoes, why would they spend their time with an investor looking at a 100k property when they could spend it helping a couple find a 300k home? This is still frustrating for me though, because this whole dealing with an agent just complicates things for me. I don't understand why I have to talk to an agent, who then speaks to the buyers agent who then speaks to the buyer. There is so much room for miscommunication and error. Not only that but from the agents I've talked to I feel like they I know more than them and that says a lot seeing as how I'm 19. Not to mention they don't realize that they are sales people and they aren't doing a very good job at selling the property and it's strengths, they are just like here it is, take it or leave it. I'm not going to say I'm the best at everything but I am going to say I'm the best at knowing what I want and helping myself get what I want. Is the saying if you want something done right do it yourself applicable to this situation? Or is it not worth the time and trouble to do all of that when you can get an agent to do it yourself? Are the real deals all off market in which you wouldn't necessarily need an agent? Is an agent or license even of value in today's market? Would getting a license help me speed up the process since I can represent myself and go view properties and pull up comps and stuff without waiting for someone else to do it? Thank you for reading this and I would appreciate any and all comments and opinions! I'm on the fence on this one so I'm hoping you guys and gals can help me see which is the best for me!
You’ll find all different answers to this but put simply my opinion is no not worth it. If you want to be an agent be an agent. If you want to be an investor be an investor.
Being an agent has a lot of fees associated with it and if you’re only doing a couple deals a year it’s not worth it. Now if you’re a flipper and you’re buying and selling 10 plus a year maybe then it’s worth it.
But if you’re just wanting to buy some rentals then it’s not worth it.
@Caleb Heimsoth Thanks for the advice Caleb! I like the idea of if you want to be an investor be an investor very wise words!
Remember most agents make very little money. It’s extremely top heavy meaning something like the top 10 percent of agents make 90 percent of the money.
I'd just call or e-mail the listing agent directly to see a place as a buyer.
Depending on how expensive homes are in your market, I believe @Russell Brazil recommends not becoming an agent unless you are buying/selling at least 5 places a year to help cover your licensing costs.
Hey Michael, I just went through the same dilemma you are in. I was dealing with an agent here in Daytona Beach Florida. He is a great agent but I started to realize early on that no one is going to hustle for you as hard you will. I was knocking on doors and speaking with fsbo sellers on my own and quickly realized I was leaving money on the table.
I spoke with three different sellers that stated they were thinking about hiring an agent. If I had my license I could have had 3 listings right off the bat. (This in 2 days, 2 sessions of driving for dollars). Being an agent also allows you access to mls and allows you to pocket commission money when selling your own property. If your planning on dealing in RE for the long haul this extra 3%-6% on deals adds up substancially. Being an agent will only gain you credibility when dealing with people and allow you to make money in many more ways than just investing. It will also allow you to negotiate directly with sellers and their agents cutting out at least one of the middle men. No more playing telephone. If you have the hustle, And you are making contacts with sellers, buyers, investors ect, you may not be able to buy or sell that deal personally but maybe represent them and make a handsome commission which you can then use to invest. It allows you to bring more value to the contacts you make, and you never know where a relationship might lead.
So ultimately, if your willing to put in the hours to get your license, willing to do loads of paperwork, it can open you up to an amazing amount of opportunity.
@Jesse McNinch Thank you for the comment! You are the first person to side with getting the license so I appreciate that, it's nice to get a different perspective!
Getting my license has been 100% worth it. I have been involved in more areas than otherwise because that is what clients want. Having easy access to homes also helped me buy my first investment property too. I always advocate that people get their license and work it for a couple of years. If you want to give it up later, at least your eyes would be open.
Should you go and get a GC license if you want to invest RE ? Should you go and get your mortgage broker license if you want to invest in RE? My answer is- knowledge is power. Point blank period
The license is just another tool to have in your arsenal as an investor .
Between me and you? Why not. It's just 200-300 in total and the course is very short. don't make a fuss about it😉
I look at real estate investing as a lifelong journey. It is my retirement plan. And I learn what I need to so that I can be better as I work toward the passive income and 10-hour work weeks lol.
If I look in the past, I was interested in real estate as a dreamer. Yes, I made goals but I didn't have everything in place. I read lots of books, then bought my own home, then in selling my own home became disgusted with Realtors I encountered. I became one to help myself first. Then bought my next home as my own Realtor, which also is my first investment property (and I got a really good deal off of the MLS. At the time it was what I could afford.) Since, I have helped friends, family, and referrals buy or sell. I found this site through my own research.
In the now, I primarily refer to 1 lender but talk to all that I encounter. I only work with lenders that I have direct access too and that answer my calls evenings and weekends. I perform DIY rehabbing when I don't understand what is involved and based on my timeline allowed. Do I want to be a contractor? No, but I want to know if I am being ripped off.
In 2018, I want to convert my current property into 2 with positive cash flow. That means that I need to get better at sourcing deals/marketing/more in-person conversations. Ironic to me, before 10/2017 I thought I could use my current property as a rental for BRRRR method though because of Fannie Mae rules (feedback from multiple lenders), I am prohibited. It's a mess. That led me to investigate 1031s, and in the fine print it is a mess. That led me to look at how capital gains taxes hits and everyone I talk to says push it off if I can. But the %s are the same, so why put off a problem that's going to come anyways. Initial thought was that if I sell mid-spring I might be rewarded. Now we have the Trump messy tax revision where the 2 years out of 5 residence rule could change to 5 out of 8, which seems to guarantee that I will get hit with huge capital gains tax anyways, so now why wait to sell? But then back to, my house is not ready to sell, lol.
That's a long answer too this question lol. The short answer is look at your long-term goals and learn what you need to for peace of mind and so you can go to the next step. As you learn, you will also become less fearful of hiring a pro or in situations where it makes more sense to pay than to do it yourself.
On this site, I run into so many people that want to side-step Realtors. It cracks me up because I get property updates every day of activity in my market. I tweak my own search any time I want, not when my Realtor gets to it. I look at it all, yes in the weeds there are some really good deals, but if I was doing it on my own without a Realtor then I would miss them. I visit properties Friday night, or any night for that matter, sometimes as late as 11pm. I look at tax rolls easily. And by watching the pro rehabbers I have learned how they are rehabbing homes for profit (in my market). I have learned how to talk to title cos to get in-depth info for pennies on the dollar. Being a Realtor is also a business for me and helps me on that end with expenses. I have also learned the land of agency as well. All Realtors are not equal. So being a Realtor is a total win for me. I am not a Realtor to make money, anyone can do that. I am a Realtor to realize profit.
Regarding other pros: In 2016, I hired my first contractor for a bathroom overhaul. In 2017, I hired my first tax pro for consulting only, I pay for print marketing services, and am looking at outsourcing much of my initial lead generation activities.
I have learned a TON from being a Realtor that I wouldn't have learned otherwise because my personal network is not that huge, that's the reality of it. Rather than ask questions and get short answers, the fact that I have a license encourages people to talk more and this helps me too.
I guess, only you can determine what helps you the most.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.