@Jordan Moorhead I'm definitely starting to see how being an agent and investor are not related. The responses to this post have really supported that fact. I definitely don't want to be working 60+ hour weeks on a regular basis!
@James W. This is a really valid point. I know that I wouldn't want my agent to have zero experience in real estate!
I think my efforts at this point are probably better spent on researching the market and investment strategies to come up with an approach that works best for my financial situation. Getting my real estate agent license doesn't seem like it would really benefit me much since my overall goal is to learn more about the market. Any suggestions on which websites work best for this without having access to the MLS? I do have a friend who has always been interested in flipping houses and has some capital, so my time would probably be better spent looking into flipping or researching to gear up for purchasing a MFH to house hack in the next year or so.
I’m a newbie too. Thanks for clearing that up. Real Estate License is off the table.
@Kayla Wagenmann Personally, I would look at MLS regularly for the areas you are interested in (pending and recent sales) to get a feel for what things are selling for and a better feel for the housing in those areas. You can go to any of the larger companies to search on their web page. I usually use Edina Realty but have used others before as the search options will change and some might have better search functions. As stated earlier, any agent can set you up with a MLS search as well.
It might not be a bad idea to connect with some realtors or investors in the area you plan to buy who can help you as well.
As long as you don't misrepresent your knowledge level (always recommend an accountant for taxes, attorney for legal, etc) and are sure you're providing accurate information to clients (correct school district, etc), I don't see any increased liability overall. That's not to say you don't have to work hard with a fairly steep learning curve, but the risk of lawsuit goes down significantly (especially if you also communicate well and follow through on your promises).
As far as taxes go, I would recommend you check with a CPA; however, I've found that the additional write-offs, etc have helped me on an annual basis overall.
I haven't found a license to be a distraction like @Jordan Moorhead mentioned, though I do agree that working multiple jobs (investing and contracting, in my case) quickly makes 40 hours a week seem very part-time. I also treat the license similar to insurance - a necessary cost of doing business. The bonus is that I typically close at least one transaction a year, in which case the costs for the license are covered (or nearly covered).
I agree with @James W. that everyone knows an agent. That being said, I was able to procure my first buyer client roughly 6 weeks into being licensed. It required routine followup with valuable information (initial contact was at an open house); however, I was able to determine values by comping MLS sales and networking with other agents. Since I had no desire to go full time into client work (I was rehabbing properties full time when I started out), that one transaction was enough to recoup my license/education fees for the year. Going full-time with numerous clients is a different beast when it comes to marketing, etc, but it doesn't sound like you necessarily want to scale that side of things.
When you add in the fact that I was able to save 2.7% on the acquisition price and 3% of the re-sale price on every rehab project we completed (30+ properties/60+ transactions over 4 years), I came out way ahead. Besides the financial benefit, I really appreciate having all of the data at my fingertips (even when I decide to "hire" another agent to represent me). This allows me to be completely comfortable with the ARV of a potential rehab, the rental rate for a 3BR unit, etc.
Although a license certainly isn't necessary to succeed, I don't believe there's any substitute to direct MLS access for quickly learning the market and analyzing deals.
@Kayla Wagenmann Congrats on your first post and sacrificing to get started as an investor. Here are my $.02 on your question You should get a license if it fits with your long term goal. If you are using it to start a side business, help take a look at listings and comps then I would say the answer is a resounding yes. If you are going to use your license to work as a Realtor part time in search of additional income to invest, the answer becomes a bit more murky. Getting your license is only a part of the costs you incur with a license, there are costs for: Brokerage fees,E&O insurance, Trade organization fees and Marketing to name a few. In addition it takes people a while to build their business into a steady stream of income while working to do so you need to learn the business and market yourself extensively. If you keep the things I mentioned in mind you should be able to make an informed decision. Feel free to reach out with additional questions.
@Kayla Wagenmann I've never done it, but I would think that even just taking the classes are beneficial to people who know little to nothing about real estate. And then working part time as a realtor can be a good idea, just be ready for another full time job, not a part time one if you take it seriously (from my experiences talking with realtors).
The answer is probably no. Nowadays, you can search on consumer MLS related sites when you want to find properties. If you are going to sell real estate, then yes.
You can get plenty of knowledge about the real estate market by driving around, going to some local networking groups, studying prices, going to open houses, touring properties, talking to investors, etc...
Hello @Kayla Wagenmann !!!!
I think it is super beneficial to get your real estate license.
Just to name some reasons
1. You can place your own offers for properties you have sought out.
2. You can gain access to the most important tool in real estate ...MLS
3.You can view the properties anytime and not wait for someone to make time for you.
These are just the three most important reasons on getting the license. Do not get discouraged in regards to the time and money spent on this. It is as vital to real estate investors as a stethoscope is important to a doctor.
Have a wonderful Day
I just wanted to give a huge THANK YOU to everyone who responded to my question. It's been really great to hear different perspectives from people involved in real estate investing. I have definitely appreciated the different perspectives, and I will be taking them all into account when I make my decision. I'm leaning somewhat on the side of getting my license to get my feet wet in the industry since I am in no financial position to be investing just yet, and I think the access to MLS would be something I would really enjoy down the line as an investor, even though I realize I can hire an agent to do this for me. I know myself, and I know I'm the kind of the person that wants to know everything there is to know, and I think that not having direct access would really bother me. Additionally, I do like the idea of selling houses. I've always been a people person, and I think I have a lot of qualities that would suit me well as an agent. If I end up not liking it, it's not like I will be committed to being an agent forever. I think it's worth a try! Thank you so much to all of you for all of your advice!
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing