I'm brand new to real estate investing and the forums.
I'm listening to the podcasts and I'm hearing over and over that it's a good idea to get your real estate license.
I love that idea, but to do it, you have to have a sponsor for several years - and that usually eats 3 percent or so of your profits (from what I've read in my research).
Anyone here from Oregon and knows how to get around that since I'm not interested in the profession - just the license?
Thank you all for your help!
Quick Google search on Oregon shows you guys the slight exception when it comes to nomenclature as both levels of licensure are called "brokers." You just have "brokers" working for "principal brokers." In most of the rest of the country "agents" are the first level of licensure and they work for "brokers" as the second level of licensure.
If you aren't interested in the profession, you are kinda screwed. Or, you need to find an "investor friendly" (principal) broker.
Take a look at this thread as it might help. I also have a long explanation on how commission work as well as the split with your (principal) broker.
What do you want out of the license? Access to the MLS? Keep a portion of the commission? Networking? Ability to view on-market properties on your own time?
Also, don't forget that keeping an active license will cost you $2k to $3k annually in dues and fees.
Thank you David!
The reason I wanted to do it was for the freedom of being able to tour properties without having to have an agent with me every single time. I've reached out to agents who have ghosted me when I told them I'm a new investor. They e-mail back and forth then when I say I'm a first time investor, bam! Ghosted. I don't want that hassle.
It would also be nice to save on the commissions and view the MLS.
The way I understand Oregon law (from Oregon's web site) is you have to take the class, pass the test then find a principal broker to sponsor you. They have to sign your application to verify you're under their wing (I'm assuming like a PA is to a doctor). I found some companies that will "sponsor" you without really sponsoring you, but they want quite a bit of money to do so. I also didn't realize $3k to keep the license. The state fee is only a few hundred dollars. I figured I wouldn't need much more than that.
Maybe you're right. Maybe this isn't a great idea in Oregon, all things considered. I may have to just keep looking and find an agent willing to put with a first time guy. Not as easy as I would have assumed.
Thanks again for taking the time to reply!!! You helped a lot.
Like I said, real estate has a two level licensure. What you are reading is pretty the same in all around the country. I have my agent's license hung with a broker. That's just the way is because probably of the liability, etc.
The State licensing fees are a drop in the bucket, correct. Once you are active, you will have such fees as
-Errors and Omission (E&O) premium (insurance)
-MLS membership fee
-brokerage fee (your broker usually charges you something, especially if they are a franchise)
If you are a buy and hold investor, it may not be worth it. Or, maybe it will be as you are starting out since 1-3 transactions will at least cover your costs a year. Afterwards, you can put your license in referrals which should cost one to two hundred a year to maintain your license.
Maybe contact some agents here on BP that are in your area if you are having a hard time finding a investor friendly agent. It would be better than you getting a license then flubbing your own deals because you don't know the profession. It took me two years of actively searching to find my agent when I started.
"Anyone here from Oregon and knows how to get around that since I'm not interested in the profession - just the license?"
Depends on what you want out of the license. If it's access to MLS or making a fee, don't know if it's worth much since you'd be better to find a broker that spends all day long looking for property.
If you do want a license, there are online classes you can take for so many hours of credit. Then you need to take the OR RE license (that was 20 years ago for me, so may have changed).
You pass, you have a license. You'll need to park it under someone with a Principal Broker's license and do some time served to apply for a principal brokers license so you can work without supervision (beyond the REA of course).
You can find principal brokers that'll take you on, however, I wouldn't since:
1) You're not going to generate that much income
2) There is a cost in giving you a desk/office
3) You pull some BS, then my a$$ is on the line as much, if not more, than yours.
Having a license is great for saving on commissions and accessing the MLS, but, as noted above, you will pay quite a few fees to be able to have that access, and a large portion of your commission (often 50%) to the brokerage that has your license. Also, you've bypassed one of your better resources if you're not working with a good realtor.
I may be reading between the lines, but if realtors (plural) are dropping you as a client, they must have some yellow and red lights flashing. Something indicates to them that you are unlikely to conclude a purchase, and they are wasting their (unpaid until escrow closing) time. Usually the biggest red light is lack of financing. Is your financing lined up? The next biggest red or yellow flag when working with a new investor would be a client who either indicates that they are using other realtors or one that simply seems to have no real plan or direction.
If you have your financing in order and have some pretty solid ideas about the type of property that would work for your new investment, then contact an Oregon realtor here on BP. They're investor friendly and here for a reason. In fact, as I'm typing this out, I'm wondering why you wouldn't do that in the first place when you were dropped by off the shelf realtors.
Thank you all for your replies. Looks like the license really is a bad way to go. You guys saved me a lot of time and money. Thank you.
As far as the agents, the last one didn't talk to me much. I contacted her because I was looking at a distressed property. Its a triplex. The owner let it fall into disrepair because his wife was in a bad crash and spends all his time taking care of her. Its been on MLS for almost a year and he wants $450k for it. I found a realtor and told her I was interested in looking at it. I told her I was a first time investor but wasn't looking to spend that much on a property in this much disrepair. I told her I was curious to know what the owner was willing to do since he's trying to offload it... drop the price drastically, seller finance, etc. She said she didn't know the owner but seller finance is always a bad idea unless you have 50% down, etc... so I emailed her back and asked her what she suggested. And... ghosted.
I have financing. Between cash on hand, retirement and equity in my home, I have enough to get started. But we didn't get that far. She didn't even ask.
I think you're right, though, JJ P. Im looking at some fsbo on Craigslist and then I'll reach out to some agents here on BP.
Thanks again for all of you. You helped a lot!
From your recount of the conversation, I can see why she stopped replying. You started off by basically saying you really weren't interested in the property --- at anywhere near that price. That just tells me you are really aren't that serious. Then, you are trying to figure out how to proceed, which most residential agents really can't help you with. Personally, your best bet probably would have been to just go see the property and made your offer. On-market listings can be difficult to get a conversation going because there are so many parties.
@Tyler Johnson I would just keep shopping for an investor friendly agent and let them do what they do for a living. They will walk you along the process. These investor friendly brokers will have executed real life strategies and have their own underwriting/analysis criteria and software. What market are you looking in?
Like you found out, getting your own license will not meet your goals if you're only doing a transaction a year. Plus beyond just the time and money getting the license, you still will need to put time into learning the transaction process, writing offers, when at the end of the day you could have hired a real estate broker (whom you don't even pay, seller does).
Not saying it's bad to understand RE laws, just be realistic.
If you're NOT charging a fee or expecting one on a RE purchase as a principal, you can either get an atty or, IF YOU KNOW WHAT YOU"RE DOING, do it yourself.
I'd focus more on getting the most contacts. If you and a RE broker are calling, that's twice as many contacts.