To Be or Not To Be A Real Estate Agent

8 Replies

Hi investing family!

Both my husband and I have fulltime jobs that pay well, but are of course capped income. Do you recommend both of us becoming licensed as real estate sales associates (agents with clients) or does one suffice?

We are interested in buy and hold rentals were we are the property management, in addition to buying and developing land in upcoming areas.

What are your thoughts of both of us becoming licensed versus only one spouse or neither of us becoming licensed. I know some benefits would be access to mls and agent fees. Are there any additional?

Thank you for your help!

Do you fully understand the costs of becoming a REALTOR? 87% quit within the first two years because it is not as easy as it looks. Real estate has a very low barrier for entry but is difficult to make a living. People that get into it and survive usually have some other source of income to survive off for the first couple of years. There are a few that really hustle and are successful in their first year but that takes a special person, the right brokerage, and some serious hustle.

If you're going to do it, I would start by saving up six months worth of living expenses. Then one of you get your license and try real estate while the other continues working their W-2 job for security. Choose which one of you is most likely to be successful to go first. After the first one has developed a business, then the second one can take the leap.

Thank you Nathan! I appreciate your honest opinion. You definitely gave me something to REALLY think about. 

Trully appreciate this because it makes sense and helps get these emotions under control lol!

@Nathan G. Yes I agree, I just became a REALTOR in Miami Florida last year. And I’m still working a full time job and trying to master real estate as a agent. And I learned that you can never master it completely. But if it’s a married couple. I agree, one should try it and then the second one take the leap.

Hi @Ronnika Dillon , My wife and I have a good story for you. I was a banker for 25 years and my wife's degree is in Interior Design. Just before the real estate crash, I started a company with several investors that buys the bad mortgages out of banks. We often get the properties back through foreclosure and my wife stepped in to run our construction crews that handled the rehab on homes. One area that we ran into was that we struggled to find knowledgable real estate agents that were truly committed to work. She went ahead and grabbed her license to list our properties. It turned out that she was great at it. I ended up getting my license to help her with all of the volume. Now, we are as busy as we can be. At first, we sometimes argued and we had trouble compartmentalizing business and our personal lives. We do work 24/7 and we have also struggled with work/life balance, particularly with our daughter. There is more than just business to think about. One thing that I would recommend, particularly when you start out, is having multiple revenue streams. Real Estate is a hard, financially uneven business that can and will cause a lot of stress on your marraige. Be sure to set boundaries and plan for the hard times. It can be very rewarding, but it can also test a marriage. Good luck!

Originally posted by @Ronnika Dillon :

Hi investing family!

Both my husband and I have fulltime jobs that pay well, but are of course capped income. Do you recommend both of us becoming licensed as real estate sales associates (agents with clients) or does one suffice?

We are interested in buy and hold rentals were we are the property management, in addition to buying and developing land in upcoming areas.

What are your thoughts of both of us becoming licensed versus only one spouse or neither of us becoming licensed. I know some benefits would be access to mls and agent fees. Are there any additional?

Thank you for your help!

I'm not saying don't do it but it does cost more than one might think with education costs, insurance, software, MLS access, etc. You're looking at like $2,500 to start up and then you've got to pay for advertising, signs, gas, dinners, lunches, and other stuff. That's all before you've made any money which most agents don't because sales is hard. Good luck!

I got my license in Maryland two years ago. I did it primarily to help my investment goals, but I was also in between jobs and not motivated for a 9-to-5. Since then I have learned a lot and made some good deals. But I have also regained full time employment a year and a half ago (not something I was actively looking for! More of a headhunter situation) and having a W-2 job remains for most of us the easiest way to qualify for mortgages!! never forget this. 

I'd say getting licensed helped me better learn the market, network with peers, learn the mortgage industry, how to make strong offers, find deals, etc. but it takes time to ramp up the income.

Somehow I got the best of both worlds with a steady paycheck with a job I get to do from home, and the flexibility to keep up with my real estate deals. I love it!

Not a ton of new material to add, mostly to add +1 to @Nathan G. and @Jason Allen responses: becoming a licensed agent is not cheap. It's actually surprising how much it costs monthly/annually when you think about how many thousands of agents there are (google says 180000 in CA alone, my town has a reported 20000!). I have been reading Brandon Turner's book on rental investing, there is a section on "should I get licensed as an investor" that I suggest you read. After reading it, I went and had lunch with my local agent who did our last buy/sell transaction, to talk to him about getting licensed and is it worth it. I am currently a high level sales person in another field, and he knows this, so even with the allure of me becoming an agent under his shingle, he said No - don't do it. At least not yet. The cost of the 135 hours of material and testing, the shingle fees, the MLS fees, and every brokerage (REMax, KW, Compass etc) have monthly fees you pay to the house to be under their umbrella, as Jason noted, to cover their agent software and whatnot. It's a couple grand a year. It's not something I would sign you and your spouse up for quickly without an aggressive plan to recoup the costs quickly. One at a time would be a better plan as already suggested. I would also recommend doing what I did and having lunch or beers with a local successful agent and asking all these questions, and they can give you a hyper-local view of their costs and requirements.

For sake of complete transparency, in Maryland I completed the classes online, joined Coldwell Banker and I am a member of the National Association of Realtor which I recommend:

Real estate courses = $225 (PDI Training - one time)

License fee = $91 (every 2 years)

Realtor association fee = $721 (annual)

Coldwell Banker Error & Omission insurance = $765 (annual)

MLS initiation fee = $250 (one time)

MLS fee = $492 (annual, paid in quarterly due)

Sentrilock access card fee = $169 (annual)

TOTAL - $2,709.

This will vary by state of course, and by brokerage.

You'll have some continued education costs as well to keep your license active.