Real estate markets are hot, and the U.S. economy has improved. A lot of people have gone back to wanting instant riches so they can party on yachts and take exotic trips. After all, that is what I see on the Internet. And if it’s on the Internet, it’s true.
In the past five years of me being a full-time investor, I’ve noticed a trend. People want to be investors, so they try it out for a few months. Then they realize the work it takes. At that point, they enroll in a real estate school. I have managed to work full-time as an investor for five years without a real estate license. And I know investors here locally who have been doing business for over 20 years without a real estate license. However, this novice investor always seems to think getting licensed will be a breeze. And if they do get licensed, they then find out about the reality of being a real estate agent.
The 20 Best Books for Aspiring Real Estate Investors!
Here at BiggerPockets, we believe that self-education is one of the most critical parts of long-term success, in business and in life, of course. This list, compiled by the real estate experts at BiggerPockets, contains 20 of the best books to help you jumpstart your real estate career.
Regardless of Your Niche, Real Estate Requires Hard Work
Real estate is one of those things where money is not always an advantage. My mentor taught me that. People who enter into real estate with money often choose not to think things through. People with no money are forced to think and get creative. And that often leads to good deals. Also, having money in real estate does not guarantee success. Oftentimes, regardless of money, you will need to work harder than you ever have to be successful.
Related: Newbies, Want to Succeed at Wholesaling? Focus on Finding Deals! Here’s How.
For example, as a wholesaler, you have to put in relentless work. Maybe you’ve noticed that a lot of wholesalers make the jump to rehabbing to get bigger and better checks. One of the main reasons is that to be a consistent wholesaler is hard. I have been able to do it due to my systems and relentless marketing. Marketing is the biggest cost in my business. But, of course, when I first started out, I did not have money or connections. It took me eight months to get my first deal. After paying my mentor, I took home $1,300. After I cashed that check, I went right back to work.
The Costs Associated With Being a Real Estate Agent
If the previous paragraph discouraged you, please keep in mind that if you become a real estate agent, you will have costs associated with your license. So, let’s say you hang your license with a broker, like in my state of NC. You are responsible for paying your MLS fee, office fee monthly, quarterly dues, and your national Realtor fee. At the end of the day, as a real estate agent, you are in business for yourself as well. There cost associated with that. I have been told by people that they will get a license to help with their investment business. That sounds good in theory, but I find it pretty hard to justify for those who have never done an investment deal. So, it probably won’t make sense to add on more overhead to your business when you are just getting started, struggling to keep marketing consistently.
Related: 3 Ways to Find Comps When Determining ARV for Your Wholesaling Deal
Now, let’s say you have the money to become a real estate agent and you go for it. Then, at that point, you need the same things to stay in business that you will need as an investor. Most brokerages charge you for marketing. Therefore, you will still need a marketing budget. Let’s say, for instance, you decide to skip out on your brokerage’s suggestions on marketing and come up with the bright idea to market on Zillow. Well, those Zillow ads are going to cost you a pretty penny if you want to make some serious cash. And now as a real estate agent, the majority of your closings are 45-60 days out. In contrast, a wholesaler we can pick up checks in as little as 10 business day.
So, can you make a lot of money as a real estate agent? Absolutely you can. But the guys who do well as real estate agents work hard. And the investors who do well work hard, too. You can close deals without paid marketing, but the people who do network relentlessly, built networks over several years, or just get up and bust their tails every day to find new leads. No matter what you do, there is no elevator to success; it’s only the stairs. My advice is to focus on one thing and make it work, then move on to the next. The people who jump from one thing to the next normally stay at a job or find their way back to a job after real estate did not give them their big payday.
What’s your take? Is getting a real estate license a good option for those struggling to start out investing?
Leave your thoughts below!