I am a new member to BiggerPockets. I am currently getting my Real Estate license in Calgary, Alberta Canada. My intent is to expand into doing more real estate flipping. My thinking is that with my own license I will have access to more information in making smart purchase decisions. Also the license will reduce my flipping costs on the resale side.
I am new to working with brokerages. Are there any real estate agents out there that could tell me about what costs I should expect to pay to a brokerage. I have heard they vary widely from commission based to flat fee. I am looking to do almost exclusively personal trades. Are there brokerages out there that cater to this type of agent. What costs will I likely incur with such a brokerage? I am in Calgary, Alberta. Local info is greatly appreciated.
Anyone have experience in this field? I have concerns that I will not be able to do enough volume to making having my own license worth while. My plan is to be flipping only 1-2 houses at a time for at least the first 1-2 years.
I also am looking for information regarding the best way to finance houses for the flip. Average house prices here are 400-500k. I have enough cash for 25% down on two houses plus flip money. What is the best way to finance the rest? I assume standard mortgage is unusable due to short term penalties. I am planning 2 month maximum terms on each flip. What interest rate is one likely to pay on these short term loans. Any wisdom on the best way to finance is appreciated!
Here is what I pay monthly, annually, and per transaction. Please know that I sought out one of the cheapest brokerages to work for and many have much higher fees.
-Association Dues: $620
-E&O Insurance: $200
-Brokerage Dues: $25
-MLS Dues: $40
-E-Contracts Dues: $20
-E-Key Dues: $15
-$199 Brokerage Transaction Fee (x2 if I represent both sides)
-$30 To Use Centralized Showing Services
Again this is just for me. I know some brokerages in my area take 60% of the commission amount. That is crazy in my opinion but they are also feeding their agents leads and taking care of their annual and monthly expenses.
As for financing, I would talk to some hard money lenders if it's a flip.
Thanks for the info Colin. The fees that you are paying seem workable for personal trades.
I hope that I can find a local brokerage that will have a similar cost structure. I have heard of some pretty exorbitant brokerage fees out there so it has me a bit worried. I will look into hard money lenders here locally and see what the holding costs are going to be.
Thanks Roy for passing on my questions.
All the best,
shoulda just stuck with flying airplanes Chris.
Haha! Kidding, good to see you on BP my friend, I'm sure you'll find the answers your looking for.
Talk to ya soon!
@Chris Scott , my answer is probably not what you are looking for, BUT If your focus is to flip properties, and you have yet to do one, I am not sure why you are getting your Realtor License. Focus on flipping homes and working with a knowledgeable realtor. Once you start to gain experience and volume, THEN you can become a realtor to save on fees.
I think you're trying to do too much to be honest.
@Ram Srinivasan, thanks for your input. My thought process is that I am planning to sell a house and a condo in Calgary and looking to buy another house in Edmonton. Those 3 trades will add up to around 1.5 million. My thinking is that if I can save even 1.5% on those trades (20k), it will pay for my license and brokerage fees for a while. I also will gain access to all the information (as a realtor) to make the best decisions in buying my next flip properties. I appreciate if you have feedback on this.
@Chris Scott - My thoughts)
1) You could hire an experienced realtor who can offer good visibility, access to the market, and fetch you a good price, which will pay for the commisions itself
2) If you wanted to, you could try to sell it over lower discount brokerages. Now personally, I do not have experience in this arena, but I do know it is more work, but the rewards could be there as well and it could save you money.
There are annual expenses, and I do also believe you will have to give part of your commission to the brokerage you represent.
All in all, it is a time commitment, and in the end, you will have to make the decision yourself as to whether or not the time commitment is worth it. Keep in mind, just because you get your license does not necessarily mean that your skill is honed as a realtor when it comes to buy or sell your house and therefore get good dollar for it.
I don't think its as simple because otherwise there would be no demand for good realtors.
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