Getting Real Estate License - Yay or Nay?

[Kyle Bunko]

Question: For those who are wholesaling and/or buying rentals, do you have your own real estate license or do you use a separate agent? Would it be smart to get your license or is it not worth the time/effort?

[Ronald Allen Barney]

Your pre-license exam study will run you about $500. It will take about 3 weeks of your time if you study full time 8 hours a day. Once licensed and insta-recruited by one of the dozens of brokerages that will spam you with glowing offers upon passing the exam, you'll bring your checkbook to your first day on the "job" and drive home about $2,000 poorer from all the required investments, fees, advances to transaction coordinators, MLS membership, etc. So your cash investment to be licensed is about $3k overall once you take all the nickel and diming into account (seems an endless stream of "fees" and "startup costs").

When you purchase deals self-representing on the buyer side you will gain commission representing yourself. The buyer agent commission will be in the MLS listing for any given deal, most typically 3% but sometimes 2.5% or sometimes a flat commission like $2,000. If you buy one big property or two small deals that will be pretty much your break even point on your dollar costs, and if you monetize your time investment which you should, toss in a third small deal to break even. At that point your cash on cash ROI goes from negative numbers up to zero.

If you're rolling in enough money to be buying and buying and buying left and right, the self-representation commission can add up to a decent savings on your deals and if you have the time you can turn to "being a real agent" as a side hustle, or in the case of investor-agent guru David Greene, the main hustle.