Updated about 1 month ago on . Most recent reply
To get licensed or not to get licensed...
Hey Everyone,
I've done a couple posts now and seem to get decent feedback. I wanted to reach out to the community and see everyones thoughts getting a real estate license. I'm currently trying to purchase a MF in my area and cost are kinda outa control. I have the time, love to learn, passionate about real estate, and have always been a solid salesperson. I am trying to find off market homes and add value to them and resell them. I thought a great way to help me save money on fees, find more/better deals, get extra cashflow, and just add knowledge I would get my license.
What are your thoughts of getting a real estate license to help further my path in real estate?
Thanks in advance, Craig
Most Popular Reply
#2 House Hacking Contributor
- Real Estate Agent
- Los Angeles, CA
I think there is a misconception on being a real estate agent. Your job isn't to sell properties, it is client acquisition. That's what you have to focus your time on. Especially right now where there is an oversaturation of agents. I'm hearing veterans having problems getting clients right now. You also aren't going to find better deals just because you are an agent. You are networking just as much and it isn't like the courses are going to help you in better negotiations or real estate investing. 90% of the questions on the exam you never use.
My recommendation is if you are up for the grind (which in the beginning takes time away from your investing goals), then get the license. But if you are only looking at it as a way to save some money once or twice a year, your time is better spent elsewhere.
I would also do the math and compare it to your W2 job now. For example:
Let's say you make $100,000/year.
Average sales price in Fresno is roughly $400,000.
2.25% commission (it varies so I'm averaging) is $9,000.
Take your split out with the broker (varies but let's say 80/20 split): Now you are at $7,200
Then you have various expenses at say 10% per transaction (transaction coordinator, E & O Insurance, marketing, gas, etc.):$6,480 per transaction.
This is all pre-tax dollars. That means you have to close over 15 deals a year to make the same at your W2 job, which may not require you to work nights and weekends. Obviously doable but the average agent does less.