Numerous times throughout the past few years, I've strongly considered taking the 90-hour course/exam to earn my license here in Indiana, but have heard mixed opinions from local agents on whether or not it would be feasible, beneficial, profitable, etc.
I currently have a W2 job as Controller of a midsize beer wholesaler that I do not plan to leave any time soon. The "issue" I'm having as of late is that I've automated a decent amount of the work processes here, which leaves me with a lot, and I mean a lot, of spare time on a weekly basis. Therefore, I get bored and spend a lot of time on sites like BP trying to expand my real estate investing knowledge! LOL. Also a lot of time spent trying to thing of other passive income streams along with jobs that I can do from my computer at work, which have evaded me thus far.
The question I have for you all is a list of the pros & cons of gaining my real estate license to use on a part-time basis.
My job is flexible in that I can leave the office to make appointments nearly any time of the day and am able to answer phone calls. My boss/owner of the company would not get upset and actually encourages me to get involved in various groups and organizations in town knowing it will take up some work time here in the office.
It obviously costs money to take the course and exam, then I need to find a brokerage to hold my license, correct? What are the average annual fees to maintain the license? Would it make sense for me to primarily act as a selling agent which means less time spent compared to showing buyers multiple homes? Do brokerages frown upon part-time agents or would they welcome me with open arms and team me up with an experienced agent for a few deals to learn the ropes? Would it just take one or two sales to break even on those annual ongoing costs?
I'd also use my license for my own investing purposes, of course, if opportunities ever present themselves in my market.
Any opinions or experiences would be greatly appreciated!!!
thats great you automated systems at your current w2! Yes, you would need to pick a brokerage to hang your license. Fees vary depending on your state, so I can't speak for Indiana. There are many brokerages out there who welcome part time agents.
It won't hurt to pickup your license as well, and its even common for agents to start part time then go full time.
I would ask, what is the disadvantage or worst thing that could happen if you pick up your license?
The fees will vary state to state, but you could call your local board of realtors to find out what yours would be. Depending on how many house you plan to personally buy, you could realistically make your money back on those alone. You can also refer buyers to other agents and make a percentage if you are unable to show houses. I just got my license in Connecticut and if we buy 2-3 properties, which we plan to do, I will make back everything I invested in getting my license and have the opportunity to work with others as well.
@Steve Bracero thanks for your input!
I’d say my biggest concern is spending the money and time to get my license, then not finding a local brokerage who wants to hang my license or partner me with a more experienced agent for a few deals to learn and gain experience. There are a handful of brokerages in town so maybe my best bet would be to contact each one and see what their thoughts are regarding part time agents and if they’ve employed them in the past.
@Joseph Parker , thanks for this post.
These are questions I've actually been pondering myself. I'm currently contracting overseas and plan on making this my last year. While I do have some money saved, I'm already in touch with a realtor back home who's finding me a nice multi family that I can house hack. Unfortunately, I'm leaving the job I'm on now which like you, I have lots of spare time to do exactly what you're doing with yours. So we definitely have those things in common lol.
Where we differ is, I'll have to find another 9-5 back home in SC and was wondering if starting off as an agent full time would be a good idea or, should I start PT until I've gained more experience and have built a client base?
I thought about this for a few years before getting my license, I know have had my license for over a year and I can offer my input on experience.
Cost of getting it: $767.02 (That was a two weekend 40 hour course, two hotel nights, food, and travel expenses, test fee)
True Cost of year 1:
Total Commissions for two sales: $6,016.88 (Two properties 195k and 167k, 2% and 2.5% commissions)
Total Expenses: $3,288.73 (Association of realtors, MLS, E-Key, CEU's, Lockbox, shirts, business cards)
Start of Year 2:
I've had 5 sales, 1 was a recommendation for a rental property listing. 4 were through family/friends.
Roughly an income of 15k+ (Before taxes)
This is my niche, working with people who wanted to house hack, 203k rehab, or live in flip. I LOVE looking at foreclosures and value add deals. I focus on getting people into good houses with instant equity. And since the seller pays my commission, people get an amazing deal and I find myself very fulfilled with helping people find their own slice of financial freedom.
Here is my best advice:
- DO get it if you plan to leave your job to enter full time real estate investing. I've found it a worth while decision if i can close 3 deals per quarter, that roughly equals my 45k teaching salary with far less time involved. NOT easier than teaching, just different. More hours on nights and weekends though. But during the day I can focus on find cash flowing investment properties (P.S. this is the ultimate goal, don't lose sight of this)
- There is no such thing as a successful part time agent. I have heard this from more agents than I know of... But I think its true just like anything else. If you are truly trying to be successful as an "agent", then you must devote a lot of time in the beginning to the process of becoming better.
- Passive Income: You noted that you were looking to increase this number, being an agent is active income. It is another job. To be truly passive, you have to have agents working under you as a team. I have recently joined eXp for this very reason. It still involves work but a different type of work like lead generation, etc.
- Flexible: I like hearing that your boss is flexible, being an agent with that type of schedule is nice. Just make sure you sell enough to make it worth your time. Typically 1 house in the 200k range pays for all the silly yearly fees in my market...
- My advice on a brokerage: Find a good mom and pop investor one. They will give you a higher split and will be well connected in the local area(my first split was 75/25). HOWEVER if you are truly trying to become an agent, sign with the larger company in the area. They have systems, processes, and education to help build you to be a successful agent. This will cost you money though, in the way of a 50/50 split. Again, if you will need a lot of hand holding, that split is fair in my opinion. And if you negotiate, work on a higher split with the more houses you sell that year. For instance, every house I sell over 6 this year the commission split goes to 65/35, etc.
Final thought: If I had to depend on this income I think I would be scared the first year. But I also think it depends on how hard you work. Its amazing to get paid on the amount of effort you put in, but the other side of the coin is that you wake up every day unemployed. But I wouldn't take back my decision of becoming a full time investor, it adds credibility, good access to properties, and puts food on the table until my rental income replaces my 45k income completely.
Best of success and feel free to reach out with any questions!