6 Reasons Why Having Your RE License Could Benefit Newbie Investors

I wrote an article about a week ago on how getting your Real Estate License as an investor could be a bad move that only snowballs into something very unexpected (If you haven’t read it, I recommend going to my previous posts after this one). I was hoping today to cover the other side, the positives of having your license as a newbie investor.

The truth is that there are consequences for anything you decide to do, Real Estate or not. There are only so many hours in a day to do things. To develop a well-oiled machine of a Real Estate investment portfolio, you must make a tremendous effort to work your craft and find deals that are going to make you money…and tons of it! So, the thing is, if you begin to tackle one thing, you may not have time for other things.

For instance, I am in the process of converting my garage into another room…totally sweet! But I would really love to tackle my garden and lay a brick pathway down. But I don’t have time, so I can’t right now. That is a negative consequence of me deciding to do one thing over the other.

Not all consequences are negative though. In the previous example, I am not going to have a magazine worthy garden just yet, but I know that I will add extra value to my home with an additional room. And once this project is done, I have the focus to shift my energy toward my garden. And then both projects are done, and I got what I wanted!

My point is that for a newbie investor, learning the hundreds (if not thousands) of different ways to break into the Real Estate Investing world can be a little overwhelming. You may be set on house hacking, but then you read David Greene’s BRRRR book and suddenly you want to do that. Then, maybe that’s an unrealistic goal, so you decide to become an agent. Your focus is going in a hundred different directions, and it is my belief that this is the reason so many young people get in, and then subsequently get out of Real Estate investing. They have a lack of focus.

So, the moral of all this is that Real Estate investing is a long road ahead. You can do many things, and being a newbie investor, you have the freedom to do one thing, stop after a while, and start up something completely different! And if you do the first thing well enough, you will have the financial freedom to pick any form of Real Estate investing you’d like!

Ultimately, I feel it to be most beneficial when you hone-in-on as few Real Estate “niches” as possible at first so you can become the expert of that field to maximize the returns. Then, when you master that field, you can reap the fruits of your labor, and move on to more personal projects in less time than had you tried to juggle it all at once. So, for me, I believe that being an agent right now is what’s best for me and allows me to gain the knowledge and understanding I need to accomplish the goals I have set for myself.

Here are 6 reasons why any newbie investor would benefit from getting their Real Estate license:

1. Getting into the game

I am writing from San Diego which is considered a more expensive market. I was also just reading that San Diego is one of the worst performing rental markets during the coronavirus according to the US Bureau of Labor Statistics and the Yardi Matrix. They said that San Diego has a 13.9% unemployment rate and rents have gone down 1.8%. With all that being said, finding a great rental property deal is challenging right now in my local market. I also don’t have a ton of cash on hand to be buying up California properties right now either.

So, in getting a license, this creates an “in” during a time when breaking into the Real Estate game can be challenging. While being an agent may take away from doing your own deals, you will be gaining hands on deal experience…which is priceless! Also, you will gain a mastery of the markets you’re involved in and connections to people who are buying and selling there.

2. Training offered by your broker

When making the decision to work as an agent, you’ll need to choose a broker to “hang your license” on. I would recommend avoiding a last-minute decision. Spend some time meeting with brokers and agents working in the markets you want to get into. Pick their brain on why they do what they do. Ask them what their brokers offer and why they chose to work where they do.

Brokers will offer a lot of different things, and you’ll have to decide what it is that you want in a workplace. There are brokers out there who understand the value of providing their agents with proper training to help them succeed in their jobs. They will pay for conferences, digital tools, books, and more solely to help you thrive. This is very valuable knowledge that can help you make a lot of money as both an agent and investor.

3. Working with your clients

It’s no secret that working as an agent is going to put you in front of many people looking to buy or sell real estate. This alone is great for anyone looking to invest. But with some success and experience, you can choose how you want to work as an agent. You can only work with only sellers which gives you endless experience selling. The same thing goes for buyers. You can also choose to work with investors.

This gives you a great understanding of who is investing in what and where. And, if you are a good agent, you’ll develop relationships with investors from all over. Having the ability to talk with multiple investors in your market is the gateway to creating passive income for yourself. Also, investors will sometimes do multiple deals a year. Compared to the average person who buys or sells real estate every few years, this can be a fountain of income for you year after year.

4. Limitless Income

The thing that attracted me to real estate most was having control over how much money (or how little) I make. I mentioned this as a negative point in my last post, but really it comes down to personal preference. It always bothered me at a job when I would work much harder than my coworker, and we walked away making the same amount of money.

As an agent, you are an independent contractor. This means that you are not paid an annual salary or hourly wage. This also includes benefits too. You make money on a commission base, so the amount you can make is limitless and it’s all based on performance. Some people prefer to know how much money they’re going to make every week. The potential to not make money creates too much fear to ever think of risking it as an independent contractor.

With the coronavirus though, are our W-2 jobs really as safe as we think they are? I worked as a Special Education teacher and never thought that my job would just disappear until it was gone, and I was left trying to just get by. Thankfully, I don’t have a family to support right now!

This is why focus is so important as an agent. While it may take a while to lift off in a successful real estate career, it may not! And with daily hard work, you can begin to earn enough to where you’d be okay if you didn’t have any income for an extended period of time (as long as you’re smart with your money. But that’s a different conversation).

The beauty of real estate though is that there will always be action. Even now, the demand for homes is so high compared to last year. Houses are flying off the market at an incredible speed. And all of this is happening during a pandemic none of us have ever faced before! It certainly beats teaching…

5. Access to the MLS

My blog mainly appeals to newbies for now, so I will assume that you’re in the process of finding your first, second, or third deal. Most likely, it’ll come from the MLS. With that being said, the desire for properties on the MLS is, and most likely always will be, crazy competitive.

As an agent though, you’ll have access to the MLS directly (as opposed to Redfin, Zillow, Realtor.com, or any other secondary source). You can view which properties are coming onto the market before anyone else has a chance to see them. Also, listing agents tend to leave private comments on the MLS that never make it to secondary listings and are intended for agents only.

This is a very competitive edge in purchasing MLS investment properties. Plus, you’ll be able to conduct the whole buying process (viewing, making an offer, negotiating, going into escrow, etc.) on your own as an agent. This not only saves you money but gives you the most control possible over your investment portfolio.

6. Working with people who understand investing

I just read a forum post a few days ago about a guy who lost his job posting on the Bigger Pockets forums. It was not Bigger Pockets’ fault. The guy explained how his boss at his W-2 job is a notorious landlord hater who even had an anti-landlord Facebook page. The guy had posted about all the money he was making with his rental properties outside of his W-2 job. It sounded like a classic case of jealousy on the boss’s part. His firing sounded like his boss’s way of saying, “You think you’re so great making all your money. We’ll see how lucky you are now.” I just imagined his boss reading the post at home when they could’ve been living their own life and nearly exploding from anger!

The point I am getting at is that when played correctly, the Real Estate investing game has the potential to make you very wealthy. And wealth breeds jealousy. It just does. I remember as a teacher when I bought my home, some of my coworkers would barely speak to me after. They couldn’t believe that a guy in his 20s could buy one home! Even when I told them that I used a partner to help fund the deal and that they could do the same thing, they still would not have any of it. And imagine I had told them that not even six months later, I’d be making offers on another one.

So being able to work in an environment that not only approves of your investing, but also supports it is very underappreciated! It’ll make your all-around life much easier than having to hide your success from people too insecure to handle it or having to fear your boss stalking you on Bigger Pockets!