Thinking about becoming a real estate agent to save money

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Thinking about becoming a real estate agent to save money

Alex Silang
Real Estate Professional · Las Vegas, NV · Member since 2013 · 225 posts · 74 votes

I'm thinking about becoming a real estate agent. I'm a landlord. It's $500-700 upfront, and I'll easily make that back in my first deal.

My question is: I don't feel comfortable buying on my own. My current agent is very experienced, has lived in the city I'm investing in. I, and manages properties on the other hand, do not know the neighborhoods and am a passive landlord. I was thinking of getting into rehabbing properties too, if so his involvement would be critical.

I was thinking some sort of arrangement could be made? Maybe ask for discount on commission fee or even hiring him on as a consultant at an hourly rate?

What do you think?

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
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It costs me about $5k per year just to maintain a license. Licensing fees, mls, board, e&o insurance, general liability insurance, increased auto insurance, ce credits, electronic lockbox access etc.

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  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    8y

    @Alex Silang I don't think there is anything wrong with getting your license if you are an investor in order to get the commission, in fact, that is how I started out. When I purchased my first four unit in Lyons, IL, I decided to become licensed in order to save the commission. I have done that exactly one time in four years! Fortunatly, I have built a business out of this, and have had the opportunity to work with tons of investors in the Berwyn/Forest Park market. 

    Your cost estimates are a bit off fyi. Your upfront costs will be more in the $1500-2000 range for year number 1. You will need to do some sort of real estate school in your state, you will need to pay MLS dues, and you will need to find a broker to hold your license. Also, you will be doing continuing education as you go. This is all manageable, but you have to decide if it is worth your time.

    One question I would have is how many deals a year are you doing? If it is 1 or less, you should probably just stick with your agent (who you already like). I have lots of team members who make money when I do a deal. My lender makes money, my attorney makes money, etc. I am not getting my lending license to save that fee! 

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  • Jadi T.
    Virtual Assistant · Philippines · Member since 2011 · 54 posts · 30 votes
    8y

    You can be an agent if you want to. I have clients who turned into buying agent to save commission. As their agent that assists them during the inquiry stage, emailing info, I've got  a referral fee from them after the transaction, Just explain it to your agent. He/She would understand. =)

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  • Martha Nowlan
    Real Estate Agent · Waterbury, VT · Member since 2018 · 151 posts · 65 votes
    8y
    If I was your agent, I’d probably be offended if you said “I’m going to get my license and then expect you to split the commission with me.” Get your license so you understand more. Learn from that agent and ask him to mentor yo. Send him referrals for other investor friends who need and agent and ask for 25% referral fee. You want him as a partner and you want to learn everything he knows. Play the long game.
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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    8y

    Yeah that's a waste of time. You say agents involvement is critical but then mention some kind of referral fee or consulting.

    To give you an idea I get contacted frequently by people on commercial deals where they went to contract but now realize mid deal they need help. They want me to consult which I politely decline. The reason is the listing brokerage is double ending the deal and getting a huge commission. I go in mid deal and get a paltry 10k to 15k consulting fee while they make 6 figures for the same work.

    I usually mention they can get a commercial attorney and pay them to help them out of their situation.

    When a broker has built a successful model of doing things a certain way it can be a bad idea to change and lose focus.

    I also have clients ask If I manage property and I decline that, along with finding retail tenants to execute leases, being a fee developer on construction projects for owners or raw land,etc.

    I stay focused on transacting existing properties with income and then syndicating my own deals as a sponsor where if I am doing a ton of value add work I will be rewarded handsomely for it and not just getting a small commission.

    You can always ask your agent friend but this is just how I would see it but everyone is different.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    It costs me about $5k per year just to maintain a license. Licensing fees, mls, board, e&o insurance, general liability insurance, increased auto insurance, ce credits, electronic lockbox access etc.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    2Reply
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