Philadelphia, PA · Member since 2017 · 32 posts · 4 votes
Hi everyone, I live in PA and is trying to invest into real estate to flip or rent like most investors are doing... However I feel that i had been running into trouble in getting to view houses in time with a realtor and making a offer before the house is already under contract. Plus i was thinking that I can save or earn the commission for buying and selling my own House. I have two questions:
1) What are the pros and cons of having a real estate license as a investor.
2) What is the fastest and best way to getting your PA real estate license. I will most likely need to take it online on my own pace due to work.
Edward I’m a investor in Philadelphia. I invest with my brother, Mike Stranix who is also a licensed real estate agent. My advise would be to find a agent that knows what they are doing and knows what you are looking for. When me and my brother buy properties we never take the commission because we want to incentivize that agent to bring us more deals. A 3% commission kicked back on a property your buying is nothing compared to 10, 20, or 30 years of owning a property that pays you rent every month while your tenants pay down your mortgage. That’s not to say that you shouldn’t get your license. My brother has his license and he uses it every day to search the mls and make sure we are both notified as soon as a property becomes available. In my opinion a real estate license is a great tool to use as a real estate investor. Where in philly are you currently buying? Me and my brothers properties are primarily located in university city and the surrounding suburbs.
Edward I’m a investor in Philadelphia. I invest with my brother, Mike Stranix who is also a licensed real estate agent. My advise would be to find a agent that knows what they are doing and knows what you are looking for. When me and my brother buy properties we never take the commission because we want to incentivize that agent to bring us more deals. A 3% commission kicked back on a property your buying is nothing compared to 10, 20, or 30 years of owning a property that pays you rent every month while your tenants pay down your mortgage. That’s not to say that you shouldn’t get your license. My brother has his license and he uses it every day to search the mls and make sure we are both notified as soon as a property becomes available. In my opinion a real estate license is a great tool to use as a real estate investor. Where in philly are you currently buying? Me and my brothers properties are primarily located in university city and the surrounding suburbs.
I did it in TX. I even have my own real estate agency (with a sponsoring broker), though I generally don't work for clients. Just myself. It has definitely been worthwhile. In two more years I'll be eligible to be a broker myself.
As a full time Agent and Investor I will say that there are many benefits of having your real estate license, however, being able to be an active agent is just not as simple as taking the license courses and passing the test - there are a lot of fees and costs to consider and if you are only going to buy 1-2 homes a year, it may just not be worth the time and financial costs.
Costs for being an active PA Real Estate Agent include:
1. MLS Fees
2. E&O Insurance (Errors and Omissions)
3. Real Estate Association Dues
4. Continuing Education Classes and State Licensing Fees
5. Broker's Cut (varies on brokerage but starting out your split is not going to be amazing ~30-50%)
Also commission are taxable income so also expect some of that as well. Not to deter you from getting your license, however, as stated above, if you are not selling 5+ homes a year, you are usually losing out financially. Also, if you are not familiar with the Agreement of Sale and other pertinent documents, you will have an initial learning curve - the license test does not teach how to be an agent. My advice, get an agent that is fast and able to make appointments right away.
@Edward Shen I'm right there with @Robert Stranix on this one. A pipeline is always more valuable than a small commission percentage when the property is likely to be of low value on the front side of the transaction.
When you are looking for a deal on the MLS, it can be difficult for things already on the market. You're not the only one looking and definitely not the only one with MLS access. Each time you are offering, think about building a relationship with the agent outside of the transaction. I can't tell you how many times the seller on that particular deal was not willing to negotiate but asking the simple question "do you have anything else that is investor-friendly," you would be shocked at how much of head start you can get. In the current climate with deals selling higher than they should and properties going sight unseen more than ever, an extra day to get your offer in can make all the difference.
As far as getting my license, I used Kaplan. Got it done in 2 weeks of dilligent work and used Quizlet for study cards that other people have made for the state and national exam
Thanks for everyone advice thus far! @Robert Stranix I am currently looking all over philadelphia and just see what tonight be a good deal out there. However, i will say i am looking at darby, germantown, university city, Temple university area, south philly, and norris square. I wouldn't mind suburb area in philadelphia as well, but i want to start purchasing houses that are under 125k.
@Zachary Paul thanks for the breakdown of fees that i need to consider. I don’t think it would cost about at least 1500-2000 every year to just have a license and use it.
@Jimmy O'Connor Thats amazing how fast you got your license! I thought it will at least take a month to finish the course hour and take the test...
@Edward Shen if you are a nerd and put a ton of hours you can bang it out really quickly. Most (if not all) of the important stuff you learn on the job
@Eric James Congratulation on becoming a broker soon! Doesn’t it take a while to become a broker? Like it take into consideration of year of becoming a real estate?
@Jimmy O'Connor I did really consider just studying it up and banging it out and than just take the exam. The school course and initial fee doesn't seem to bad. However it seems the MLS, broker, and Insurance fee is where the money really cost you. Can you get the license and wait to decide on what you want to do with it? Like if you want to actually hang it with a broker or actively use it i guess...
@Eric James Congratulation on becoming a broker soon! Doesn’t it take a while to become a broker? Like it take into consideration of year of becoming a real estate?
@Jimmy O'Connor I did really consider just studying it up and banging it out and than just take the exam. The school course and initial fee doesn't seem to bad. However it seems the MLS, broker, and Insurance fee is where the money really cost you. Can you get the license and wait to decide on what you want to do with it? Like if you want to actually hang it with a broker or actively use it i guess...
In TX it's 4 years as an agent and having completed a certain number of transactions to become a broker.