Lender · Glen Burnie, MD · Member since 2018 · 39 posts · 12 votes
So big question here bigger pockets. I want to be a real estate investor. Do I have to get licensed as a real state agent ? What are the pros to having your license?
Good question, Sean. A bit ironic as I think most on here would agree that the majority of agents don't understand/participate in real estate investing. There are a few pros to getting your license including but not limited to:
Access to the MLS Being able to see properties quickly, without needing your agent to tag along Saving half the commission on the sell side of your deal
But there is the additional costs of continuing education and splits or fees you may pay to hang your license with a brokerage. So you have to weigh the pros and cons.
You do not need to be an agent to invest. In fact I would put that money toward a deal as opposed to a license.
Good question, Sean. A bit ironic as I think most on here would agree that the majority of agents don't understand/participate in real estate investing. There are a few pros to getting your license including but not limited to:
Access to the MLS Being able to see properties quickly, without needing your agent to tag along Saving half the commission on the sell side of your deal
But there is the additional costs of continuing education and splits or fees you may pay to hang your license with a brokerage. So you have to weigh the pros and cons.
You do not need to be an agent to invest. In fact I would put that money toward a deal as opposed to a license.
Hi, @Sean Beksinski! Welcome to BiggerPockets! You do not need to be a real estate agent to also be an investor. Being a real estate agent would come with its perks though!
Perks such as, access the MLS and being able to pull your own comps, and even saving some on agent fees. Helpful, but not a requirement. hope that helps a little!
You do not need to get licensed as a real estate agent to invest. And, if you were thinking of investing out of state it may not even be practical to get your license since you don't live in the state and are not familiar with the areas. So, the benefits you would get from working with a experienced and motivated local agent that has insights to what areas fit your investment goals would be something you would still be missing even if you did get your RE license.
Now, if you are investing in your own state and in areas that you know then getting your real estate license might be worth it, especially if you are trying to save as much money as possible since you could earn the real estate commission on homes listed on the MLS or with sellers that are paying commissions to agents. In addition you would get access to the MLS to search for deals. Now I know that many people say there are no good deals on the MLS and therefore MLS access is not a big deal, but that's when you focus on the list price, so work the numbers and figure what purchase price would make it a great deal and offer that. You might end up with one that makes sense for you. And like everything there are trade-offs and not working with an agent definitely has downsides. A great agent can protect you from mistakes and pitfalls, just like a good lender, appraiser, home inspector, and title company.
There are other considerations and points of views and I'm sure others will give some of their opinions and insights, Best of Luck!
@James Stinnett hey james sorry I’m new to this but how do you figure out if the numbers are good ? Is it some complex trig ? Haha. Just kidding I know it isn’t complicated but how do you figure if the numbers are right ?
@Sean Beksinski Hey Sean, no worries, I'm new on BP and though I have had a SFR out of state rental for 14 years and been a real estate broker in CA for the same time I've just recently made the decision to invest in more OOS real estate -- so I'm learning new stuff on here each day too! So, about the numbers, I would take a look at the Tools section of BP where they are calculators for several different types of real estate investments, they also have some video tutorials on how to fill-in the numbers needed to run the calculation. Hope that helps some, feel free to PM me if you have some specific questions, happy to share what I know!
@James Stinnett hey james sorry I’m new to this but how do you figure out if the numbers are good ? Is it some complex trig ? Haha. Just kidding I know it isn’t complicated but how do you figure if the numbers are right ?
There are lots of threads and blogs and podcasts on the subject here. Go to the education tab and select guides. There are a few free guides to get you started.
There are two distinct things to know
How to evaluate deals
Your market so you know what numbers to put in the formulas.
You can learn #1 here. You learn #2 out on the streets not behind a computer screen.
@Sean Beksinski - There are several different calculators and each have their own calculations that are done to give the resulting numbers. I don't know exactly all the steps for each of the calculators, but I think you would get a lot of value by starting with some basic calculations and learning those first: Income, Cash Flow, Cash on Cash Return, Cap Rate...
Have you checked out the Guides under the Education tab on BP? There is a guide called The Ultimate Beginner's Guide To Real Estate Investing -- I would start there, I'm actually reading it now, and learning somethings I didn't know. Check it out! Hope that helps!
THe webinars show how to find and input the #'s. If you're not a pro, you can find it on Youtube. Brandon does it every few months to help new folks and refresh the rest of us. I enjoy the webinars but often put it at a slightly faster speed on YouTube if I'm familiar with it. I can always back up and slow it down if I need to repeat it. Good luck
When I was a young adult, I started reading about real estate investing. I decided to get my RE license to help accelerate my learning & progress on my investment objectives. Note that this was before Al Gore invented the internet (LOL) so info availability was in the dark ages compared to now. So having MLS market data and analytics back then was super valuable. I'm not so sure about that now. I let my RE license expire a long time ago and I don't think it has held my investing back. Below are a few more thoughts on pros/cons.
Pros:
If you're new to real estate in general, you'll learn the mechanics of RE transactions, the governing laws and the key participants and services that support a transaction.
You will interact with other realtors that may help accelerate your understanding of the market values and dynamics you're working in.
Cons:
You might be held to a higher standard as a licensed agent in a transaction that goes awry. I don't see anybody talking about this on BP. So this could be litigation exposure.
Costs to acquire and renew your RE license.
Your RE sales colleagues and brokers are much more likely to not be savvy investors, and may offer you lots of unsolicited advice against pursing investing as they themselves avoid it (or are too lazy to pursue it).
If I was starting now, I would not get a license. I believe it would be of limited value, and perhaps even a hindrance in my opinion.
Hello Sean! the answer is probably one of the first thing you will hear and "no" is the answer. One of the biggest pros is the knowledge you will gain and possibly the networking. Trying to save a little money paid on real estate commission is usually a negative on being productive. It takes a special real estate Agent to do both. I was a real estate broker in Texas for about 30 years. The answers you get will be divided mostly by the Agents and the non-Agents that will have the different answers. Another pro towards