Real Estate License Worth It?

Question

I am trying to set up rentals and flips as a side hustle. I am looking for my next investment and wondering if I should get my realtors license to help speed up the property inspection process and save a little to put towards renovations. I would still need a broker to work with, but I am not sure if they would do that with someone who just would do this on the side. Does this seem worth it?

Jake Andronico · Answer

@Jordon Young

Great question. I work w/ multiple flippers and larger investors in Reno, NV. The biggest flippers and investors I know incentivize property managers and realtors to bring them deals.

They're still incredibly profitable and have the most business out of anyone.

If you want to get your license, no shame in that in the slightest (it's been my full time job for years now and I love it), but a realtor who has a great deal would likely not send it to you if you're licensed, as they would want to represent you and could give the deal to a client who is willing to work with them.

At the end of the day, 100% your call, but this is what I've seen locally be true more times than I can count.

Best of luck to you!

Bo Smith · Answer

Short answer: Not worth it as a side hustle, at least not for what you're describing.

Real estate licenses have ongoing requirements -- you need a broker, you're paying annual renewal fees, continuing education hours, E&O insurance. If you're just using it to buy your own deals, you can't get commissions on those transactions anyway. That doesn't offset the cost.

The actual reason to get a license is if you're building a buyer client base or doing deals frequently enough that commissions offset your carrying costs. As a side-hustler doing 2-3 deals a year, you're burning money for compliance paperwork.

For your situation, I'd skip the license and just focus on sourcing. You can find better deals off-market by building relationships with wholesalers, contractors, and other investors. That costs nothing. Once you hit 5-10 deals a year and the commission income makes sense, then revisit the license question.

The inspection process thing -- you can get a general inspector for 00-500 per property. That's cheap compared to getting a license and maintaining it for "maybe faster inspections."

Are you thinking the license would help you build buyer clients eventually, or is it really just for your own deal flow?

Rod Hanks · Answer

Short answer—usually not worth it for what you’re trying to do.

Getting your license doesn’t really speed up inspections or give you special access to deals. What it does do is add cost, time, continuing education, and you’ll have to hang it with a broker who likely wants a split or fees—even if you’re only doing a few deals a year.

The only real benefit is saving the commission on your own deals, but even that isn’t always clean. You still pay broker splits, and more importantly, you take on added liability and disclosure requirements every time you buy or sell.

Most investors are better off building relationships with a solid investor-friendly agent who can move fast, bring you deals, and handle the transaction side while you focus on finding, funding, and executing deals.

If you plan to do a high volume of flips or start representing others, then it can make sense. But for a side hustle with rentals and a few flips—your time is better spent finding deals, not getting licensed.

Richard F. · Answer

Once you are licensed, you must disclose this in writing with every RE transaction, and it will be up to your Broker what you are allowed, or not, to do since their license would then be on the line too. This is just a fact of all State Laws AFAIK, and most Brokers. If you can get work with a Property Management Company (vs. only retail Sales), you probably will have better opportunities, as long as they allow you to accept listings and purchase offers for others. In that case, you can make some good commissions while you earn salary or wage for the primary position.

How do you see the license helping you if investing and flipping is your goal?

Jordon Young · Answer

I was thinking about it mainly for me. I have a job that pays my bills so I'm not looking to become a realtor. Long term rentals is more of my retirement plan and Im looking for a good way to build my own capabilities and give myself a little edge. I currently have 4 doors and am positioned well to pick up my next property, but Im having trouble finding deals that seem worth investing in, in my area.

Jordon Young · Answer

I was imagining it could speed up my access to properties to assess and make the decision if a property is worth it or not. I was also thinking it would save some cash to put towards renovations. Good deals seem hard to come by these days and few percent between purchase and sale seems like a chunk that could be worth chasing.

Real Estate License Worth It?

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