Having a Real Estate License as an Investor

by | BiggerPockets.com

More divided than Team Edward or Team Jacob for tweens comes the debate of Investors getting a license or not getting a license.

I personally have worked in the real estate world since 2003, the majority of which I did not have an RE license. I got my license several years ago, as many investors did, to be able to work more intimately on short sales.

So, coming from someone who is an investor, rehabber, and licensed agent, here’s my cumulative insight on whether getting a license is worth it.

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1) What’s Your Risk?

This is the biggest stopgap I see with many investors choosing the route of remaining a free agent. Once you have a license, you are held to a different standard. Contracts, advertising, and disclosure are just a few of the new requirements that are regimented according to local guidelines.

You may feel more comfortable remaining “just” a principle in an LLC, or even as an individual if you are working as a Buyer of property. If you are licensed and acting as a Buyer, it may not impede your business model if you are removed from the Seller and have representation.

The risk comes if you are going to involve yourself in representing the Seller or acting on their behalf, say in a short sale situation, and you have the intention to purchase the property.

There are fiduciary responsibilities and whens the lines get muddled, it is easy to target the practitioner. If you are acting in your own best interest and the Seller is doing the same, it makes for a lot clearer transaction.

Related: BP Podcast 019 : Short Sales Tips, Starting Out in Real Estate, & Working w/ Virtual Assistants with Tracy Royce

2) Advertising

Depending on what you are soliciting for, you may have to include logos, disclosures, and follow regulated guidelines set by governing standards.

This may in turn get your direct mail thrown away more easily. If the receiver thinks you are “just some realtor” trying to list their home, your efforts may be falling short.

However, as an unlicensed person, the “We Buy Houses” or other simple marketing can tend to have better reception from Sellers. It’s not impossible to advertise as a Buyer of properties if you have a license, but again, you may need to run it by your Broker to make sure your messaging is compliant.

Related: Investors: Should You Get Your Real Estate License?

3) Alternative Solutions

The biggest draw to having a license is access to the Multiple Listing Service. However, you may be lucky enough to find a generous Realtor that will allow administrative access through their portal.

Whether it’s a small fee, helping with marketing, or other administrative duties, being able to access MLS is crucial portion of your business you cannot go without. If that is the main reason you are obtaining licensing, it may not be worth it when you can simply connect with someone who does not use their MLS in high volume.

As far as listing homes, there are low fee brokerages that will charge a flat fee for putting your property in MLS. Similarly, there are agents that will represent you for a negotiated rate or price, depending on your needs.

Personally, having a license has only helped my business, but there are certainly days I miss the anonymity. It has not hindered any deals and there is always the option to team with other agents to act as a listing/buyers agent on any of my deals.

Much of where the licensing issue comes down to the question of how you are structuring your business. Whether the accreditation and licensing will help more than hurt is something you will need to weigh once your model is clear and your role is established.

What do you think? Did you get your license and regret it? Or have you chosen to stay unlicensed?

Photo: ADD Photography

About Author

Tracy Royce

Tracy (G+) is an Arizona Short Sale Realtor, Investor, Rehabber, and Foreclosure Expert. She also is an avid blogger, vlogger and consultant on all things Arizona Foreclosures.


  1. I started working with real estate as a loan officer in 1995. In ’98 I started flipping houses and was a licensed Realtor until 2002 when Iet my license lapse as I focused 100% on the investor side.

    For the last 10 years I was strictly an investor but have now gotten my license again. Personal preference I suppose.

    • Aldrin contreras

      Hey Stuart I am interested in becoming a REI in New Jersey. In your opinion, should someone like me who has no real estate experience and plan on wholesaling properties with no money to start, get my license to avoid getting in trouble with the law? Or is there a way to get properties on contract and sell without a broker license? I see you have quite some time and experience in REI so your info wel definitely be considered and appreciated! Thanks in advance!

  2. I likegetting a commission when Ipurchase a property through MLS or Ican leverage that for a lower price. I have a background in real estate marketing so I ferl I do. Good job selling my homes plus theres that 2.5-3% commission I save or I look at it as payong myself to sell my own property. I admit it is a pain on my buy and holds

  3. Great topic! I’ve been licensed over 25 yrs. and never found it to be detrimental, just be sure to disclose. Saving money on commissions & having MLS access 24/7/365 has been huge to building my portfolio & finding deals. Even today, as I’m less active as an agent there’s still a huge, huge advantage for me, unlimited passive losses that can offset earned income.

  4. Michael Woodward on

    Thanks for the article Tracy. I’ve been going back and forth on this idea for a couple years now. Last year I took most of the courses but eventually decided that it was going to be a hindrance so I didn’t finish them. This year I finished all the courses but I’m having second thoughts again about taking the exam to secure my license.

    Ultimately, I want my business to run in such a way that there’s someone in place to handle almost everything that needs to be done day to day. One of the most important people to have on my team is a VERY good realtor. I want to have someone that’s intimately familiar with local real estate looking at all of the properties that I consider buying to help me thoroughly evaluate them…..choose the right ARV, etc…. That’s where I keep getting stuck……if I’m going to use a realtor for the reasons I just described, then I lose the reason for becoming one. I understand the benefit of sharing the commissions but I want my realtor to be happy working with me and committed to working hard for me (for a LONG time) so I like to pay him/her top dollar. I also want my realtor to pull MLS info for me to help screen the potential properties.

    The other consideration for me is that I want to be able to send out yellow cards and letters to solicit off-market deals. I feel that the real estate disclosure laws (TN) would prevent me from sending “vanilla” letters out that don’t have any kind of realtor disclosure.

    Given all of that, do you think someone in my position should get their license? I think I just talked myself out of it again but I would like to hear your opinion.



    • Finding a realtor that will stick around for a long time is usually more difficult said then done, but you have the right idea about setting it up so that they get top dollar. But, most agents find that working for an investor becomes quite tedious and will eventually move on, or learn what you’re doing and do it on their own.

      Can you not send out “I buy houses” and have another agent represent you? You can solicit for Sellers, even if the house is listed. Just have someone else write up the contract. I’m in AZ so of course you have to abide by local regulations.

    • As Tracy pointed out getting a Realtor on your team to do that long term is not going to be an easy thing.
      There is no reason that if you want a more experiences agent to work an area for you that you can’t still do that if you have a license.

      The big advantage there is that you see the deal and pull your own comps to see if it passes the sniff test. Then you can engage your agent for their special knowledge of the area to see if your desktop comp analysis holds water.
      By not wasting their time pulling hundreds of comps on dozens of properties you never even put offers on will be the best way to find and retain a good agent.

  5. I had my license from 2008 to 2012 then let mine lapse. The fees were high imo and I couldn’t see using it anytime in the near to middle future. I have MLS access now via assistant status through a colleague who is licensed. I send him my clients who need realtors and pay my own fees, so it works out well.

  6. Robert Domino on

    While I understand a lot of the points given above, they forget the financial aspects of a transaction.

    Say you’re in the flipping business. You buy a house for 100k, do 40k in repairs then sell it for 200k.

    Having your license would save you 3k on purchase and 6k on resale (assuming 3% commissions) = 9k total.

    Personally I would prefer to pocket the 9000 than give it to Realtors, until I get big enough where being an agent is a bad use of my time.

  7. After 10 years of not having a license, I dropped my application in the mail 2 days ago. In such a tight market you must act quickly. Most agents do not keep as close a watch as I do on new listings.

    • Two agents in the same house? Yikes!! Just kidding…My thoughts are the same…how are you setting up your business? It shouldn’t be a big deal and you will still have to disclose that the Buyer has a license and is related to the Agent (at least here you do). Once you get your business model in place I would just run it by your broker.

        • Kristi Leavitt on

          I have been wondering the same thing, seems like you could have the best of both worlds if you did it that way.

  8. Bliss Mitton on

    I have had a brokers license in California since 1975 and a brokers license in Georgia since 2010. I also bought and sold houses in Florida and Texas without a license. The first consideration is – If you emotionally feel you must lie to the seller to get a good deal…do not get a license. Second consideration – I get my deals through direct mail. My license helps to get more value from my advertising dollars. Not every call is an investor deal for me. However, some make great, below market listings. These deals add to my income, get more dollars from my advertising and expand my business contacts with people who are getting results. Third consideration – I feel that stating I am a buyer who is a broker gives my claims in the advertising authority: “I can handle the paperwork”, “I have dealt with many situations” and so on. Last consideration – If you are only going do one or two deal a year “on the side” I do not feel that getting a license is of much value… or if you have not done any deals you do not really know if you will do a deal, so wait on the license.

  9. Hi Bliss, this is a perfect breakdown for those who are doing some volume and can sit on either side of the fence ie investor or agent. Can you expand on what you mean by you are expanding your business contacts with people who are getting results? Do you mean Buyers Agents who are representing serious cash buyers?

    • Bliss Mitton on

      Tracy…When I take a below market listing it is usually on a house that TLC. Sometimes that type of buyer is going to be a “retail’ investor. I add this person to my wholesale buyers list after closing. If they liked the listed property they will love future wholesale properties. This builds my list of investors that other wholesalers do not know about. Also, the real estate agent that found the investor usually works that market segment. When I have another similar listing I let this agent know early and it helps me speed up sales/income. – Fast small money helps to get thru to slow big money. – I also get calls from other agents asking about the listing. Even if the property is not right for their client I add the agent to my list for early info on future listings.

  10. James Ormond on

    Hi Tracy,

    Thanks for another great post, and I enjoyed your recent podcast interview as well. This topic has been on my mind a lot lately. I’m trying to get started, planning to buy and hold primarily, but I also have construction experience and would not turn down a good deal begging to be flipped. Anyway, I’ve considered getting licensed several times in the past, just haven’t pulled the trigger. Since beginning to learn more in-depth about REI, I’m more confused about whether or not this would be an asset or a hindrance.
    I have been thinking that the additional education and contacts I would gain might be worth the modest cost and time required to take the coursework, even if I never sit for the licensing exam…I have a little time before I begin acquiring properties (6-8 months) so I thought I would take the course, learn a little more, and then decide whether or not I want to get licensed.
    What do you (or others) see as pros and/or cons of this plan?
    Thanks again for your gracious and generous contributions to BP!!


  11. Much of this discussion is about saving money on the commission. I to got a license for that primary reason only to find out afterwards that as a principal in a RE tranaction (buyer in this case) you can negotiate ANYTHING in the terms of your offer! That means if a property is listed and you contact the listing agent without an agent representing you, you can (as part of your offer) discount (really whatever you want) the 3% Buyers commission as a principal to the transaction.
    It doesn’t work that way on the other side, that is you being the seller. It has to be listed by a Realtor to get in MLS and (usually 3%) and co-op fee to Buyer’s agent of 3%. for a total of 6%. Sure you can negotiate these numbers but if you skimp on the Buyer’s comm. and go under the 3% very few Realtors will show your property.

    Here’s my 2 cents. If you have the time and want to become as knowledgeable in this field as you can this is a really good investment in your time. Hang it with a broker that will help you with the paperwork (lots of it) and if it gets in your way down the road for any reason dump it. You still retain your knowledge and experience without the liability. I haven’t met anyone that has stopped trying to learn this business (that stays in it). You will be a better investor with the more you learn.

    BTW I’m on my 2nd to (3rd or 4th) listening of the BP Podcasts. I can’t get enough of them. I compare my notes from the 1st time and compare to most recent and find stuff I didn’t pick up the 1st time. I keep a folder of them and refer to them.

    Hope that helps.


  12. Daniel Francis

    I think having your license gives you such a competitive edge. Let’s face it, so many of seller calls end up to be listings. Investors without their license spend way too much time on the phone “screening” their leads. We don’t ask anything on the phone, we just set an appointment! Face to face leads to more deals, without a doubt. And when we can list the property if that’s all that’s there, why not just go! I think the drawbacks are so overblown. I can’t think of one instance where I have felt it has hindered our ability to make a deal.

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