Getting Licensed for Rehabs

5 Replies

I'm contemplating getting my R.E. license to make my rehab deals more profitable. But I'm unclear on the broker/realtor structure. If I get licensed as a realtor, I have to sign up with a broker in the area, correct? And if I decide to purchase a home with the intent to rehab, in theory, I can keep 3% of the sales price, both when I acquire (if listed on the MLS) and when I sell, correct? But a percentage of the commission goes to the broker? If so, what's the customary split.

And if I acquire a deal off-market, how does my license affect the sale?

Lastly, because I don't intend to become a realtor as a profession, do I have to sign up with a broker or does the law state otherwise. I'm Texas, if that makes a difference.

Thanks for any clarification?

Here's the thing you got to go interview some brokers and on this form is knocking to give you great advice I don't think

There's two kinds of brokers that I know of, the first type is a 50-50 split and they pay for training and I like Keller Williams 

read their books on Amazon 

millionaire real estate investor, millionaire real estate agent, and shift are great books

There are other types of brokers that will cost very little per deal but you need to go find them 

small brokers that will charge a small amount of money or a flat fee per deal

The best place to start is your REIA president and ask him if you do get a license who's the best realtor broker to hang your license with if you're fixing and flipping

I am not licensed in Texas but I doubt it is that different from other states. Yes, you do have to work for a broker. The split between broker and agent is whatever you and the broker decide. A beginning agent will likely get a 50-50 or 60-40 split but here are many other costs you will need to pay to belong to National, State, regional associations as well as mls fees, E&O fees as well as stationary, gas, continuing education to name a few.

You may also have an office fee and a website fee, forms fee as well.  All your transactions belong to your broker meaning commissions are paid to the broker and he extracts his cut and then you get yours. Even though these are your own properties the transaction must go through your broker per many states laws. If you are primarily working your own properties you may have a hard time convincing a broker to take you on especially if he or she gives you a bit of a break on commission on those properties.  Brokers care about making commission money and you ar not bringing any into the brokerage you won't be welcome.

Keep in mind many brokers have a minimum amount of business you must do to stay in the office.  Several here in NorCal that translates to 4-4.5 million total sales.

@KJ D'Costa

In order to get paid a commission as an agent you will need to hang your license with a licensed broker. You can find 100% commission brokers who will let you keep all of your commission. My current structure: $149 one time sign up fee, $49/monthly fee, $395 per transaction whether I am the buyer/seller or just the agent. If I make $5000 in commission I keep $5000-395. If I sell my own house I pay $395 to him plus any commission to a buyer's agent. 

In terms of what you get as an agent, you can put yourself down as the buyer's agent on something you buy and get the commission back either as a credit at closing or in a check after closing. When you go to sell, you will save yourself the 3% listing fee that you would have to pay someone else to list your property if you aren't licensed. 

If you really want a lot of training you can go with someone besides a 100% commission broker. You won't get a ton of support/training with a 100% commission broker, but if you are familiar with real estate contracts and are comfortable then maybe that isn't a bad thing. Especially if you don't want to do it as a full time job, I wouldn't be willing to give up 20,30,50% of my commission on my own deals. 

Hope that helps. 

Originally posted by @Brandon M. :

@KJ D'Costa

In order to get paid a commission as an agent you will need to hang your license with a licensed broker. You can find 100% commission brokers who will let you keep all of your commission. My current structure: $149 one time sign up fee, $49/monthly fee, $395 per transaction whether I am the buyer/seller or just the agent. If I make $5000 in commission I keep $5000-395. If I sell my own house I pay $395 to him plus any commission to a buyer's agent. 

In terms of what you get as an agent, you can put yourself down as the buyer's agent on something you buy and get the commission back either as a credit at closing or in a check after closing. When you go to sell, you will save yourself the 3% listing fee that you would have to pay someone else to list your property if you aren't licensed. 

If you really want a lot of training you can go with someone besides a 100% commission broker. You won't get a ton of support/training with a 100% commission broker, but if you are familiar with real estate contracts and are comfortable then maybe that isn't a bad thing. Especially if you don't want to do it as a full time job, I wouldn't be willing to give up 20,30,50% of my commission on my own deals. 

Hope that helps. 

Agree.  If you are primarily handling your own transactions, I would not recommend going to a name-brand firm and pay a lot of fees.  Check if your office is part of the National Association of Realtors as well.  If the office is signed up for that association, then you would have to pay a hefty annual membership fee for that.  Most, if not all name-brand firms are part of that association.  

IMO, 100% firms are the way to go if you are primarily doing your own projects.

Thanks for all the replies.

@Adrian Chu and @Brandon M. , a 100% commission broker is exactly what I need. Thanks for the quick education.

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