getting licensed
Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 633 votes
So I got sick of those calls where they didnt have enough equity for me to buy but they still needed to sell. I guess after the 20th one or so, I thought hey why am I throwing this money away and ending the calls with "what you need is a realtor, let me give you the number of XXX. - good luck!". So I decided if I can't buy it, I can stil sell it. Can't hurt right?
So - I've talked to a few brokers. I really just need a place to hang a license so I can go about doing my own thing legally. I've taken the classes and test and am all set. I've found a broker that I like.
Before I do this, I guess I'm looking for some last minute advice. Is there any reason (besides disclosure, which I understand and don't see as a major setback), that I should not do this? Is there some way being licensed could harm my goal of investing? Has anyone done this and regretted it? Anyone that did not, and wishes they did?
Looks like I did.
That direction makes sense. The agent has no liability exposure to the initial owner in most cases.
Now, if the wholesaler and the agent consistently do deals where the wholesaler gets the property under contract and then the agent steps in a judge could look at a the pattern and decide against you. Keep the deals clean. Nothing too far in the gray. Make sure the wholesaler sells to other people rather than operates exclusively for the agent. Remember that a judge can have a bad day and decide things that are not how you would interpt the law.
Tangent: I was just doing a deal where there is a lawyer on both sides. Not a state that would use lawyers to close a deal. They are there because the seller is in the middle of a meltdown so there are all kinds ot lawsuits, liens, etc.
Both lawyers were unaware of a state law concerning what is regulated by the state. This is the state they are licensed/practice in. Both lawyers tell me they do a lot of RE work. I happened to have the state regulation and sent them a copy. All of a sudden the contracts had to be changed.
The reason I had the statue was a licensed RE agent here on BP mentioned something and I asked them some follow up questions. This was a number of months ago long before the lawyers were involved. Score one for BP and definitely watch your backside when it comes to the laws vs. what people (even lawyers) think is legal. Ignorance of the law is not a defense. Much less so when there is serious money involved.
Being a successful RE investor means really knowing your game. Be the professional who knows more than the public or professionals who only dabble around the edges of RE.
John Corey
Perhaps an answer has surfaced...I was just about to sign up with a bigger name broker....Then I get a call back that i was waiting on. There is a large investor group in central state. They have no representation in the northeast and need it. This is a very succesful creative investor who has grown a pretty large outfit and now has about 5 agents throughout the state.
They do what I was already doing but on a larger scale so I can integrate well with that. Sounds good....of course I take any big time investor with a grain of salt at first as the business does have its share of sketchy folks, but I'm going to check it out Tuesday. Maybe its the way to go.
Minna, that sounds great!
John, as a followup to your tangent: In New Jersey, you can't assign real estate contracts. At first I thought the realtor just didn't know what an assignment is but I did some checking. It appears to be true.
I had to change to a simultanious close but the deal fell through on other grounds.
Jeff,
Can we go into the tangent a bit more? If so start a fresh thread and drop a link into this thread so people can find the conversation.
At some level I have heard this before for Oregon. I also know a lawyer that has a private opinion from the state that says something different. I wonder what aspect of selling a contract or an option NJ is successfully blocking.
Looking at it from the NJ view assigning contracts is commonly used to effectively broker deals so I see why they want to stop it.
More in the other thread.
John Corey
Good ideal John.
I started a new thread: State and Local Gotchas.
I mentioned what I said and tried to sum up what you said. Please check what I wrote and correct any errors I made about what you said.
I have honestly always been opposed to this idea, but I am a different type of investor I think than Minna. My primary source for finding properties is through my real estate team in Michigan, where I invest and rehab. I primarily buy bank owned properties. Since I am an out of state investor I do not see it being benefical to me right now.
Now in the future, possibly next year, I plan on looking for deals around where I live, I could see how having a license would be a great idea for finding properties as you would have full MLS access and be able to make contracts on REOs first, plus get a small commission on every property you purchase.
The problem for myself is I do not want to sell people's houses, the only thing I would use for licensing is buying my properties, maybe finding people homes, and having a legal way of accepting referral fees through birddogging.
Justin,
How is Michigan doing for you? I looked at it but at the time it seemed like I was behind the wave. Now I see a lot of unsold inventory.
Are you doing buy and hold? I can't imagine that you are making money flipping there. If you are, please start a new topic. I would be very interested in how you are doing that.
Jeff,
Not to go to much off topic, but I really like where I invest at. Its where I invest at primarily if that tells you anything. I am a newer investor, and unforunately when I started, flipping on the retail market became really hard.
Now my primary exit strategy is to sell to other buy and hold investors at a great discount. We get them rehabbed up to full city compliance and my property management company markets to potential tenants.
The market I buy in has some incredible deals right now and because of that I can easily sell my rehabbed rentals for incredible discounts to investors looking to buy and hold for cash flow.
My secondary exit strategy is to just refinance, pull out some money, and keep the property as a rental, preferably on a lease option.
I love lease options, especially in today's market. I get to pull out some money in the front from the refi and their deposit, plus monthly cash flow. Then we work with the person's credit to get them to buy back the property within 12 months. Of course all of these people are pre-screened to ensure they can buy within 12 months on the right course.
Feel free to email me if you want more information.
How is Michigan doing for you? I looked at it but at the time it seemed like I was behind the wave. Now I see a lot of unsold inventory.
Are you doing buy and hold? I can't imagine that you are making money flipping there. If you are, please start a new topic. I would be very interested in how you are doing that.
Minna,
Just curious, what did you end up doing? Did you get your license, if so how is it working out?
I am still debating on this myself.