Should Investors Get Their RE License?

Question

Hi, what are the pros and cons of getting your RE license as an investor? I realize there could be a million answers and my situation is not your situation..but I need some general input nonetheless,  so here are a few brief facts about my situation:   -thank you in advance.

Fairly new investor, age 52, three properties and 4 rentals, 2 STR, 2 LTR, I can almost cover my bills right now grossing about $80K in rental income this year, but I'd like more cashflow for breathing room and investing, especially with the fluctuations of the STR market,

in 3 years I'll start receiving retirement income of about $10K/mo (assuming the world doesn't fall apart), I have about $100K in the bank right now enough to get to that point and maybe even buy another house or condo..

my goals are to scale a bit more to 5-7 properties in the next 3-5 years. and coming from a high paying busy sales job one year ago, I find it hard as a new investor to "stay busy, create more cashflow, find direction, know what paths to follow with so many options (should I wholesale? syndicate? stick with SFH or move to commercial? )

I feel like getting my RE license will distract from these goals and slow me down, can you really be a "part time" realtor? I'm more of a "full-time all in" kinda guy...but it will also perhaps fill my desire to create another income stream, get more educated, stay as busy as I want to, save me money on future buys...it would be a slow 1-2 yr process correct? to get under somebody or out on my own?  - Many thanks!

Eliott Elias · Answer

You open the door to so much more opportunity by being a realtor. You can make commissions on all your deals and represent others on deals

Terry Ouimet · Answer

good insight @myrtlemikethompson that makes a lot of sense and yes,  I hope to not sell any properties in the near term, only buy. I think even if I did follow through and get my license, and become an expert in this area of CO as a realtor, I would still likely hire a realtor in the state that I was buying in. Thanks man!

Myrtle Mike Thompson · Answer

@Terry Ouimet I think having your license is more beneficial when it comes to SELLING your own properties.  If your goal for the near term is to continue buying properties, I think the process of acquiring and maintaining your license would be more trouble (distraction) than what it's worth.  Better to partner with an experienced investor-friendly agent who can help you locate, analyze, and secure deals.  Congrats on all the success you've had thus far.  If you ever set your sights on the Myrtle Beach area, hit me up!

Terry Ouimet · Answer

thank you @marshall leipprandt that is really helpful information and I love that approach of logically putting some numbers to it and working backward. I really agree that it would be easier to hire a realtor and stay in my investor lane, focused on scaling..but I do place a large value on having another skillset that can earn me money, keep me challenged and interested while I learn and grow that arm of my biz.  I really need to network with other investors and get a mentor to go to the next level of investing, thats what I'm struggling with right now , the deadspace between investments and managing 3 properties is not a 50 hr week job-thanks man! all the best to you

Marshall Leipprandt · Answer

@Terry Ouimet It's true, being a part-time Realtor is not as easy as it sounds. Also, keep in mind that you'd need to stay up to speed on all proper documents and forms in your state as well as maintaining a status with your local Association of Realtors, pay for MLS access, pay for lock-box access, attach to a brokerage and onboard with them, along with several other items. So, if you'd like to know if it would be worth your time, I would suggest you work backwards to get to that answer.

If you are wanting to purchase another 1-3 properties, calculate how much you would save on commissions if you had your license, but also factor in the flexibility of having that license and being able to save on the selling end if you ever choose to offload your portfolio. Next, get an estimation of what your annual costs would be for your AOR, MLS, lock-box, and any other expenses/dues associated with a Realtor status. Run the numbers and see if the potential upside would be worth your time. It could just be easier and more effective to hire a really good Realtor!

In terms of getting your license, it depends how much time you have available to take the courses and how familiar you are with real estate across the board. You could totally do it in less than 6 months if you really worked at it, but 1 year could be more realistic given the career scenario you've described.

I got my RE license while working full-time and now I am a full-time Realtor and investor. I am very glad I got my license while I was still working so I didn't have that dead time once I left my day job. Even if you worked at it everyday, there are somethings you can't control in the license process like mandatory timeframes, scheduling for testing, etc.