How many of you REI have a RE license?
Real Estate Broker · Gibsonia, PA · Member since 2013 · 828 posts · 260 votes
How many of you REI have a RE license?
Most Popular Reply
Brian BurkePro Member
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votesYES!
1. Broker
2. My own
3. All pros, no cons. Impossible to do my REI at the scale that I do without it.
4. Zero, but I don't buy/sell RE for clients myself
5. Nope
6. N/A
I got my license so I could facilitate my own transactions. Run my own comps. Mine for my own deals. And, most importantly, hire an army of agents to find property for me, and sell them (the properties, not the agents!) after rehab.
29 Replies
- Residential Real Estate Broker · Pensacola, FL · Member since 2012 · 221 posts · 49 votes13y
Mega Realtor/Significant Investor here. Search the threads, lots of opinions on this. Hades YES to license IMO. Good luck. :)
- 13yBrian BurkePro MemberInvestor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
YES!
1. Broker
2. My own
3. All pros, no cons. Impossible to do my REI at the scale that I do without it.
4. Zero, but I don't buy/sell RE for clients myself
5. Nope
6. N/AI got my license so I could facilitate my own transactions. Run my own comps. Mine for my own deals. And, most importantly, hire an army of agents to find property for me, and sell them (the properties, not the agents!) after rehab.
- Real Estate Broker · Gibsonia, PA · Member since 2013 · 828 posts · 260 votes13y
Thanks for quick response. Can't wait to see what others are doing too
- Real Estate Investor · Sioux Falls, SD · Member since 2013 · 415 posts · 84 votes13y
Brian Burke I assume it is that same in CA as it is here in SD, where you have to be an agent for (i believe) 2 years before you can be a broker.
Did you have any issues with your broker the 1st 2 years there or didnt this apply to you there?
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
1. I am the principal broker and owner of my commercial real estate company.
2. Own my own
3. All pro's. Used to have a residential side as well and took a 300 per transaction fee from agents. Goal was to eventually sell off residential to another 100% company once it became big enough. I had at one time about 45 agents but go rid of them all.
Most agents work a full time job and occasionally do a sale maybe once or twice a year. They are usually rusty so you as the head broker end up doing most of the deal for them and collecting a measly 300 bucks.
Usually maybe 2 out of every 10 agents will have a closing a month so for every 50 agents you are talking maybe 3,000 gross a month in income for the brokerage. A little better in some cases but what you have to understand is you get bombarded with paperwork from the state real estate commission. The agents do not pay for license renewal fees, do not take required continuing education classes, lose license for student loan delinquencies , child support issues, get IRS levy notices on their commissions for back taxes owed and on and on. It's really almost like managing children who have issues with their lives.
I got tired of all of that and for a long time now just do my own deals and close commercial deals for my clients (apartments and also triple net leasing). I could have brought in an associate broker for the residential side but decided to not have it all together as I really do not like residential anyways.
4. None. I am constantly looking at property for myself or my clients so they work hand in hand with one another. I do not work with just any clients. They have to show me proof of funds and that they are real and realistic before I spend time with them. Buyers can talk great all day long but having the liquid cash that they control to act on and purchase a deal is where the "rubber meets the road".
5. No
6. N/A
Originally posted by Jennifer Lee:
1. Are you an Agent or broker?2. Where do you work? (Big/small brokerage, own your own)
3. Pros and cons?
4. How much of your Investor time has being an agent/broker taken away, if any?
5. Have you lost any deal with "disclosure disclosure"?
6. How did you negotiate your independent contractor agreement with your broker? (Fees, marketing, education)
Thanks in advance, at crossroads, already taking my courses
Yes.
1. Agent
2. Large but regional brokerage (not one of the big names)
3. Pros - Control our deals, MLS access, Commissions
Cons - Restricted in how we conduct our marketing4. We spend about 5-10 hour per project doing agent stuff. We're also control freaks, so we'd probably spend that much time trying to control our deals even if we weren't officially the agents. The time includes negotiating purchases, listing/marketing, dealing with showings, negotiating contracts, handling inspections/appraisals with our buyers, managing the closing process, etc. Again, mostly stuff we would be involved in anyway, even if we weren't the official agent on the deals.
5. I'm guessing our marketing is probably a little less effective due to the disclosure required (we can't rely on "mystery" to generate calls). But, once we're on the phone or face-to-face with sellers, our license seems to add credibility. People like to know that we have a "boss" they can complain to if we don't do the right thing.
6. It's a standard agreement, not negotiated. We pay our own marketing/education/tools costs, and then we pay a monthly fee and a per-transaction fee to hang our license with the broker (plus another $200 per year for E&O).
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes13y
As mentioned above, there are quite a few threads discussing the same item so look for those to see even more replies.
Someone above said hell yes! I say hell no! Again, it depends on your usage of the license. I was a licensed real estate broker in California and Colorado back in the 70s and early 80s. I used those licenses to run brokerages in both states and also to generate commissions on my own properties both in purchase and sale.
In my current situation, with the experience and knowledge I have in real estate, and absolutely zero interest in being an every day real estate agent, I find no benefit to me in being licensed. There are benefits in negotiating with owner, and developers, where you don't have to deal hold all the information you have to as a licensee. I'm still able to purchase any property I find an normally saved at least one side of the commission. In many instances, especially here in Utah, I list the property to get it on the MLS but I do the negotiations with the buyer directly. In this manner, I'm able to use my knowledge and expertise but not have to jump through all the hoops that are real estate licensee must jump through. Rich
- Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes13y
As a broker I think the license could hender a new REI.
The commission carrot will keep most away from the real dollars being an investor. Learn how to buy housing and use the license for your own benefit.
- 13yBrian BurkePro MemberInvestor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
Aaron Junck, yes, CA has a 2 year experience requirement. They also have an exemption for equivelent experience, which among other things can include experience as an investor or developer. I qualified under that exemption thus I did not work as an agent for 2 years prior to obtaining my broker's license.
- Real Estate Investor · Sioux Falls, SD · Member since 2013 · 415 posts · 84 votes13y
Brian Burke, thats awesome .. hmm I wonder if SF has that option here? I will have to look into that . Thanks
- Real Estate Broker · Gibsonia, PA · Member since 2013 · 828 posts · 260 votes13y
Thank you so much for all the response, especially from all sides of the table.
AS for me:
NO, I don't have one YET.
12 yrs ago I got my AGENT license in ASIA.I was out of college. and a starving agent. took me 9 month to close my first deal (RENTAL) so only got 1 month rent for all my troubles.
BUT having said that, that 9 month experience taught me a lot about the psychology of the buying/selling of homes.
WE didn't have MLS and the such there, it was all cold calls and walk ins. driving around looking for "vacant" homes at nights.
I got married and moved to the USA.
I never felt the need to get one. I always thought being an investor was a better deal for me. But that was before when I was doing a deal every 2-3 yrs, waiting on CAPITAL.
when I FOUND A DEAL, I did all the leg work, call my go to broker and have her NEGO/CLOSE in 30-60 days.
I have NEVER SUCCESSFULLY SOLD A HOME, I BUY/HOLD/RENT.
we have only sold 2 home, and it was our LIVE IN FLIP (4 yrs) and my first FLIP from hell (my tuition fee I called it)!
TODAY, I am looking into getting my license.
because other ppl has started to invest with me, and I found I can't write anything off, or get paid for my services. Right now it's a FREEBIE for an immediate family member.it's a WIN-WIN b/c I am new in the area and wouldn't have my own capital bc I just bought a commercial retail bldg.
AND I bought a 2 RE in that pass 90 days, and looking at a couple more this year!
J Scott after reading a lot of your post on the subject, I really do want the control you keep mentioning.
SO here I am getting my license. I am just a little SCARED, bc MARKETING is my WEAKNESS
This time I WON'T be a Starving Agent, in fact I don't need the commission, it all for the resources and control
- Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes13y
Yep, I have my license and am a very active investor.
If YES,
1. I'm a broker.2. In Michigan you can be an Associate Broker for a different Principal, and be a Principal of your own firm. I'm both. I do all my deals under a different broker for various reasons, and still maintain my own brokerage.
3. I really see no cons with being an agent/broker and investor. There is only upside, if you properly disclose that you're licensed.
4. Since I'm a very active agent and investor, the time is split rather well. Back when I was doing a lot of flips, the agent side of me helped keep that side of my business going strong. Now that the flips have slowed down, I've leaned more toward the agent work and let the rentals continue to produce the cash flow.
5. Never once have I lost a deal with having to disclose I'm an agent.
6. There was not much to negotiate with the Principal broker of the company I'm an agent under. The deal was already fair as it was presented. Things have worked out well ever since.
Most investors who are also agents will confirm that being both has helped them far more significantly than those who are not both. Of course there are the exceptions to this. Being a person who likes to have control over finding my deals, getting them submitted, and presented the way I want, I find having the license to be invaluable in getting my portfolio to where it is now. Plus, you're one step closer to the agents who get the listings to the deals you desire. The relationships built can be invaluable.
- Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes13y
1. Agent
2. Local Brokerage
3. Pros - MLS access (both for purchasing and selling), saved commission costs, direct communication with other agents
Cons - have not come across any yet (disclosure has not seemed to make a difference)
4. The amount of time varies for each project but I can't see how we would save much time by not being the agents. Sure, there are some extra phone calls and paperwork involved, but we would have to do the same things just with a middleman.
5. Nope!
6. Ours too was a standard agreement.
Thus far, I would say being licensed has only helped our business grow and save us money.
First time poster. To answer your questions (since I had the same one when I started):
1) I'm an agent. I'd be a broker but in Texas it's not just a matter of classes and tests. You have to be an agent for several years.
2) I work for my own company, however (as required by law) my licence hangs with a random broker. B
3) Pros of being an agent are numerous. But the bigger ones are access to forms, access to MLS, and often when I buy I'll put myself down as the selling agent and use the commission to lower my down payment. Another big advantage, frankly, is as an agent you have to deal with other agents less. Meaning if I see a property I want, I can contact the seller/agent myself and view (via supra or other) without having to have another agent set it up for me. If I like a place I fire off a contract that's filled out and ready to be signed and don't have to have someone else do it.
The only "negative" really is that when you deal with a buyer/seller directly (that doesn't have an agent) you need to be sure to disclose you're an agent. There are also small costs and time (continuing education) but they're pretty small given the advantages
4) Zero time taken away, with the exception of the random classes you might have to take every year or so. They're done online (or can be) and are pretty easy to knock out.
5) Never lost a deal, but gained countless because of being an agent.
6) I found a broker who, honestly, does nothing. And that's what I wanted. There are no marketing, classes, etc. with him. I've never met him in person (I hope that's okay to admit?) I pay him a fee to work under him and pretty much do my own thing. I pay him $80 or so each time I close a deal (to cover E/O, doc review, etc.) and $100 or so a year. That situation works perfect for me as I'd shoot myself if I worked for a big brokerage and had to follow their rules. But that's me. I need to do my own thing to do well.
- 13yJustin PiercePro MemberRental Property Investor · Woodbridge, VA · Member since 2008 · 543 posts · 121 votes
Yes, I'm licensed with a small firm. I've never lost a deal because of disclosures. If you're flipping homes you absolutely need direct access to the MLS and full controls for pulling good comparable sales. I don't trust anyone who does not have their neck on the line for the full life of the deal to tell me what a home is worth. That is the best value of being licensed.
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes13y
I want to just clarify one thing. I deal with a lot of for sale by owners in single-family residences, and land. I understand from the posts above that the agents are explaining to the seller that has no agent representation that he, the buyer, is an agent. That is not the question. The real question is, when you find a property that the seller is motivated to sell at a price considerably less than what you know is market value, do you explain this to your seller?
I've read about several instances in the past where the agent was sued and the seller won significant damages for not receiving complete disclosure from the buying agent. This can also amount to not divulging information known by the buying agent. It can be anything from soil conditions to comparable prices, etc.
A non-agent buyer is considered just like the general public and is not considered a professional with extra knowledge not available to the seller and doesn't have to divulge. This was the concern that I was stating above. Rich Originally posted by Rich Weese:
The real question is, when you find a property that the seller is motivated to sell at a price considerably less than what you know is market value, do you explain this to your seller?I don't normally buy from private sellers, so this isn't typically an issue for me. But, this seems a little weird, for several reasons:
1. I don't represent the seller, so I have no fiduciary duty to the seller;
2. I'm not an appraiser, so I can't legally define the value of the property to the seller;
3. As an investor, I have a million pieces of information that the seller doesn't have, and it would take days for me to tell the seller everything I know about the property that the seller doesn't know. I assume if I would legally have to tell the seller everything I know about value then I also would need to legally disclose everything else I know that the seller might find important, which again, could take days.
If I were a Realtor -- governed by NAR -- I'd have a responsibility to act in a certain ethical manner. I'm not a member of NAR, so that doesn't apply to me.
Regardless, I agree that any agent should act ethically, even with customers (as distinguished from clients). Is non-disclosure unethical? While you could make a case that lying is unethical, I find it hard to make a case that not disclosing everything the agent/investor knows is unethical. Again, I know millions of things I don't tell the seller.
That said, if this is true, it's something that all investors/agents should understand, as we all like to minimize risk.
Can you provide any examples where an agent/investor was successful prosecuted/sued for not disclosing value information of the property they were purchasing (again, not lying, just not disclosing)?
I'm not trying to be argumentative -- I'm just trying to sort the "conventional wisdom" from what can be legally substantiated. There are a lot of things in this business that a lot of people seem to believe are true, and it's good to sort fact from fiction.
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes13y
I'm a licensed agent and general contractor. My husband is my broker. Saves us alot on commissions, etc. Has never been a problem being licensed.
- Real Estate Broker · San Diego, CA · Member since 2012 · 104 posts · 20 votes13y
1. Broker
2. Work for myself. Got my license with the "college degree" exception route a long time ago and didn't have to work as an agent for 2 years. Sometimes I use my license, sometimes I don't, but I keep it current regardless. Used to do 3rd party commercial property management for a long time and a license was required.
3. pros - MLS access, access to Realtor standard forms library, commissions to offset closing costs.
4. none
5. no
6. n/a - Involved In Real Estate · Sherman Oaks, CA · Member since 2012 · 11 posts · 2 votes13y
Though the question seems to be very simple, but the truth is it’s not a yes or no answer. I think a piece of paper is not enough to show that we know real estate – my financial statement and 20+ year track record prove that. The knowledge that I gained taking that class 20-some years ago – helped me get to this point.
- Real Estate Professional · Salt Lake City, UT · Member since 2010 · 609 posts · 163 votes13y
I have been investing for about 10 years, seriously for about 4 years and have had my license for a little over a year. In my state there are minimal disclosure requirements for all types of marketing. I thought making those disclosures using direct mail was going to hinder my response rate. I do not think it has. I actually think it helps when meeting with people, as I have learned to use it to my advantage to gain trust. When it ts time to discuss numbers, I tell people you can NET "A" by listing the property and "B" if I buy the property. This is a simplified explanation, but it is the process. I back everything up with comps etc. I tell them I am going to make money on the deal and disclose all of the above in an addendum. I am very glad I got my license.
Originally posted by Gary Parker:
In my state there are minimal disclosure requirements for all types of marketing. I thought making those disclosures using direct mail was going to hinder my response rate. I do not think it has.I mentioned above that the direct mail disclosures are the one *minor* drawback to be licensed.
Just to clarify, the laws in my state are similar to yours...the issue is that my broker is more strict than the Real Estate Commission is. If I were to switch brokers, this would be even less of an issue, but it's not so much of an issue that I'm planning to switch at this point.
Originally posted by Rich Weese:
I want to just clarify one thing. I deal with a lot of for sale by owners in single-family residences, and land. I understand from the posts above that the agents are explaining to the seller that has no agent representation that he, the buyer, is an agent. That is not the question. The real question is, when you find a property that the seller is motivated to sell at a price considerably less than what you know is market value, do you explain this to your seller?
I've read about several instances in the past where the agent was sued and the seller won significant damages for not receiving complete disclosure from the buying agent. This can also amount to not divulging information known by the buying agent. It can be anything from soil conditions to comparable prices, etc.
A non-agent buyer is considered just like the general public and is not considered a professional with extra knowledge not available to the seller and doesn't have to divulge. This was the concern that I was stating above. RichIn my state, you must disclose in writing that you are licensed. I write in on the purchase agreement that I'm a licensed broker. There is also another form that we sign stating who the buyer works for. I have the seller sign acknowledging that I work for the buyer, since I am the buyer. It has never been a problem. I've never had a seller question or imply that they are being taken advantage of because they are dealing with someone who is licensed. It's just like selling a car to a dealership. You don't receive as much money, but you have a solid deal and it's handled in a smooth fashion. I also let them know that because I'm licensed, I'm held to a higher standard than some guy off the street. I need to make sure all of my i's are dotted and t's are crossed. People understand this and feel comfortable.
Another thing that I explain to unlicensed people that I'm dealing with is that in Michigan, you must be licensed to do more than five real estate deals per year or to spend more than 15 hours per week in real estate activities. If a seller (or buyer) questions the fact that I'm licensed, I explain this to them and let them know that I have to be licensed by state law. It's never a problem.
I think there are many advantages to being licensed and no disadvantages.
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes13y
Sorry about the slow delay. Leave for 2 weeks in Dubai in 1 day and tons of loose ends. Also, a horrible family situation. One of my sons has an 8 month pregnant wife that is suicidal and disappeared a few days ago. More important than posts here.
The first instance was in CA in late 70's early 80"s and I still had a Brokerage there and in CO. The case was an unlicensed owner/seller selling to a licensed agent his own property. Agent was sued for non disclosure of value and somehow his E&O insurance came into play. Agent did lose the suit ( not sure if settled) and not sure if the E&O helped with it or not.I remember having someone come in and explain all this to the staff in both CA and CO, but not sure where he was from. 35 years ago. I've read about at least 2 others over the years.
No one in this thread has stated they bought from unlicensed person for significantly less than value and TOLD seller in advance. No BS about willing buyer-willing seller. We all know when we got a killer deal or "stole" a property. Did the knowledgeable agent disclose this in advance? That is what the kicker was in previous examples.
There are MANY instances where the buyer has sued agents for non disclosure. Better to disclose and sleep well or have big E&O insurance. Sorry if that doesn't explain to your satisfaction. My only question is , Do you explain you're stealing the property as an agent? Rich
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