License or No License?

5 Replies

Hey everyone. I know this topic has probably been debated 1000 times, but did want to provide my feedback as I'm currently taking the Real Estate Salesman course.

I’ve always listened to the pros and cons of getting your real estate license as an investors, and have come to the resounding conclusion of YES!!

I should be taking my test in about 3 weeks or so. The first couple of weeks of class... VERY tedious and boring for my senses. However, once we got into the meat of things so to speak…, lots of great information on the different types of mortgages, contracts, roles as lenders, realtors, qualifications for easements, occupations, ..

The whole course actually opened my eyes more as an investor than I thought it would. It helped provide a valuable foundation to UNDERSTANDING YOUR PRODUCT, which I think gets overlooked a lot of times in the pursuit of making money as quickly as possible.

So, I highly recommend it to anyone looking to become a real estate professional, or someone just serious in acquiring a good amount of properties. My initial intent was merely for the MLS access. But, the course has proven to be a valuable educational tool and far more than I expected.

Good luck!

Thank you for your point-of-view.  I had a license back when I managed and leased commercial, industrial, and retail property for pension fund investors.  I had to.  I was representing other parties in real estate transactions. 

When I became an investor buying and selling properties for my own interests, I let it lapse.  As an alternate point-of-view, here are my reasons:

I have an interest in everything I do nowadays.  In any transaction when I am a party in the  transaction, a license is not required.

It was more of a hassle than it was worth.  Predominantly, the syllabus for the courses themselves and required continuing ed courses are written for the agent who represents the retail home buyer.  They give you the information you need to know to remain compliant with state law but with the exception of a few (like the ones on appraising), really don't teach you anything more about successful investing. The information in ones that could potentially help an investor can be learned elsewhere (or simply take those if you are so inclined).  I found taking them an unnecessary distraction from my business consuming time I could otherwise use running, building, and managing my investment business.

In any transaction, you have to disclose that you are a licensed agent and remain compliant with all the reams of  disclosure paperwork some government bureaucrat created to justify his or her make-work job to create the illusion he or she was protecting the public.  Said differently, as an investor buying and selling for my own interests, it was burdensome and even occasionally confusing to the other party.

You have to park your license at a broker.  That means you have to run all your transactions through your broker and the broker will get a percentage of every one of them.

You have to carry E&O insurance.

MLS access is valuable, but ways exist to access the MLS without having a license.

Now, the courses that teach using the MLS are valuable, but those are not required to get a license.

Please don't take this as raining on your parade.  If you have taken the courses and gone through the steps, you might as well sit for the exam and get a license.  Moreover, many of the people I read about on these forums who are working at wholesaling probably should have a license because they are really operating as agents and not investors, and the way they are practicing wholesaling will get themselves and innocent wholesalers who are practicing wholesaling properly in trouble.  That not withstanding, getting a license is not necessary for success.

Originally posted by @Rafael Norat :

Hey everyone. I know this topic has probably been debated 1000 times, but did want to provide my feedback as I'm currently taking the Real Estate Salesman course.

..................................................

The whole course actually opened my eyes more as an investor than I thought it would. It helped provide a valuable foundation to UNDERSTANDING YOUR PRODUCT, which I think gets overlooked a lot of times in the pursuit of making money as quickly as possible.

So, I highly recommend it to anyone looking to become a real estate professional, or someone just serious in acquiring a good amount of properties. My initial intent was merely for the MLS access. But, the course has proven to be a valuable educational tool and far more than I expected.

Good luck!

 Yes, that's what I've been telling people for a year or two, learn the basics! It makes a BIG difference in investing.

The cons pointed out above may not always apply. Personal deals can be done outside a brokerage at at no fee however, 1.5% can be well worth the insurance the broker has and the admin support. E&O is generally on a per deal basis now through the broker's policy. I never had an issue with disclosing I was a broker/agent. We have a selection of continuing ed, you do need to keep up with laws, even as an active operator or investor, but there are financing, business, multifamily, etc courses (wide selection) that count for requirements.

Best thing is, you don't have to walk away from the table because it isn't a good investment deal, just list it! You can also work the buyer's side.

Now that you understand real estate, you can apply any strategy talked about on BP! Good luck :)

I got my real estate license for the sole purpose of investing. However, I've gotten very involved in the retail side of the business and I love meeting people and spending time with my clients. I definitely agree with you and recommend investors or anyone who wants to just get an abundance of knowledge about the real estate business!

I agree with the 'get your license' consensus.

While passing a test in no way prepares you to make money for yourself or others, it does expose the licensee to the basics of real estate such as ownership benefits, title, basic documents, some law, financing, valuation, ethics and duties of an agent and of brokers.

It's scary how little many agent know, however. In my early days I had a license, did not hang it with any brokerage for some years, and chased deals for my own account in a somewhat clueless condition. All problems were mysteries to me, especially title/liens because no one explained to my satisfaction how liens attach or how discovered.

Another problem is that there are many real estate educators who are not really in the business, teach crap to naive newbies (as we were all new at one time). I had no way to detect solid trainers from the dream merchants.

Alas, I didn't really begin learning and mastering my craft until I immersed myself in the business full time, found a broker mentor who was willing to guide me and tell me the truth about prospects who were not qualified, hence, not deals.

I've been licensed for over 35 years and recognize that there's no guarantee that a licensee will make money but I can assure you that you can easily invest for your own account without a license being a handicap.

Much appreciated for the feedback guys. I know there are many angles here, but coming from an engineering background, there is slot of catchup work I'm doing here. That's where I think a lot of people really jump to investing as there eduction platform without truly knowing what they are investing, which is what I realized I lacked when taking the course.

Not saying the knowledge can't be learned elsewhere, but I'm at least getting it thru the course.

I also feel having the option to list or refer to a realtor a transaction which may not have enough equity to serve as a wholesale transaction is beneficial as well. I don't see the disclosing part as an issue legally or by impression. There are always ways to frame a transaction legally to accomplish your goals. And if there isn't then you shouldn't be there.

All in all, the course has forced me to really learn the product..

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