Hey BP, I've been a long time observer and have been actively listening to the BP podcasts over and over and have finally felt the confidence to propose my starting out strategy. I'd like a discussion about my approach and if it is scaleable and approachable within my current strategy. So, currently I live abroad. I've been saving the majority of my income for several years and now I'm looking to come back the the US. I'm looking to come back to Portland, OR area. I'm currently 28 years old. I'm devoting the year I have left to learning as much as I can about RE investing and looking for more insight as I continue my education. Basic Question: What do you think is the most important: RE Agent licensure or GC licensure with experience? I've been looking into applying for my RE licence abroad or self studying for me G. Contractor license, whilst abroad. I've done some work with construction and enjoy the budget/managing/ work scope aspect of being a GC. However, I'm quite introverted and don't ideally see myself marketing in my future. What i'm most concerned with is what aspect of investing control I should focus on in my year of studies..Online, I could focus on getting my RE license or prepare for the studies of learning about GC licenser. I know I already love building wand using my time to make something anew and problem solving, but also, I use my free time to scour the MLS. So, what do you think is more valuable? A focus on understanding the RE market of your farm area, submitting offers, negotiating deals, evaluating the marketplace. Thus, getting my REA license. OR Obtaining my GC license eventually with knowledge and skills on estimating rehab costs and being a trusty and effective GC. This would also be my future employment prospects if investing would not suffice for my living wages. Being my first post, I hope I don't sound too naive. I'd like to learn as much as I can and welcome any insight or commentary. Thanks!

How you choose your REI niche/market?

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

12y

Welcome to BP Kyle!

Where most make a very time consuming mistake in RE investing is starting out with specialized markets, starting with some niche or strategy. If you chose the wrong one for the market you're in, you'll be limited to the point you may fail and just get out all together. What you do depends on the market.

Begin by learning what I keep referring to as the basics, that is what is initially taught in RE schools for agents. You'll see the economics of RE, understand the conveyances of RE, what rights are held, how financing is accomplished, how to value properties and markets and different uses of properties as well as your state laws and local customs. All RE is local.

Then, strategies will fall in place and you'll have a clearer understanding of how and why.

RE financing is the key to the door of RE. Understand conventional rules first as eventually financing will be anchored in these rules and concepts. From there you'll understand that any creative financing method leads to meeting conventional terms, you can't target something you don't see or understand.

Having construction experience is great! Anyone in RE needs an understanding of the construction elements of improvements.

Can't really say go into construction management or flipping or buy and hold. All make money. Choosing what you do should include anything and everything, which the basics gives you the tools to do. Any niche then becomes market specific to your area. I'd suggest you go local and not deal in national investing strategies starting off, doing so means you won't be in the driver's seat but relying on others in management, valuation, financing and general operations.

Have no idea of your skills. not just RE knowledge or experience but your social skills, ability to deal with the public and others. RE is a personal, face to face business.

Not saying be a RE agent, but it's an option, frankly the key to success is knowing and meeting people, if you know people you'll have a great advantage starting out.

No one here can really tell you which way to go is best for you. I suggest you start by being able to do most anything and adapt to your market as it constantly changes. Good luck :)

3 Reply

J ScottPro Member

Moderator

Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes

12y

Hands down, I would suggest Agent over GC...

In fact, I'd go so far as to say having your GC license may even slow you down at first, as you'll focus too much on working IN your business as opposed to ON your business...

Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)

4 Reply

Eric Blanchard

Specialist · Portland, OR · Member since 2013 · 96 posts · 19 votes

12y

I'd go with Agent. No matter which you choose, you'll need to be knowledgeable about spotting viable deals and putting them together. A GC is easy enough to hire, and being your own agent will help you keep on top of the mkt better. Plus you get paid to purchase your own property :)

1 Reply

Corey Davis

Los Angeles, CA · Member since 2013 · 169 posts · 27 votes

12y

@Kyle Webb two questions:

If you're "quite introverted, and don't see yourself marketing" what are you going to do with a RE licence?

Ultimately, what do you "want" to do? What end goal are you aiming for specifically? As in, what kind of day to day routine are you looking for?

1 Reply

Michael Do

Contractor · Tigard, OR · Member since 2014 · 30 posts · 25 votes

12y

Kyle, As a general contractor in Portland,OR I would wait till you get back. I'm currently doing a couple flips now for investors and both houses are miles from each other and are totally different in approach and finishes. I'd wait till you get back and choose the area you want and price range. If you were going to do anything my preference would be for a real estate license to make it easier to find the deals. Once you have the deal running the project you can do with a GC and you can act as a manager of him. Good luck. Let me know if I can help when you return.

1 Reply

J ScottPro Member

Moderator

Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes

12y

Originally posted by @Corey Davis:

If you're "quite introverted, and don't see yourself marketing" what are you going to do with a RE licence?

I'm tremendously introverted and my license helps me immensely.

Here's what I can accomplish with my license (regardless of my being introverted):

- I get access to the MLS

- I can see any listed house I want anytime without having to coordinate with another agent

- I can be present at my buyer's inspections and appraisals without any issues (since I'm the agent representing the seller, who is me) and I can chat with the appraiser in a way a typical seller typically wouldn't

- I can negotiate directly with the other agent, as opposed to having to go through another agent representing me

- I can talk directly to my buyer's mortgage broker (buyer's are happy to give permission to the seller's agent)

- I can call listing agents and ask questions like, "Do you have any offer on that property? No? Well, my client is interested in making an offer...perhaps you can give me some price guidance?"

Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)

3 Reply

Patrick T.

Specialist · Spokane, WA · Member since 2014 · 97 posts · 38 votes

12y

@Kyle Webb being a GC and having been an active realtor myself, I can say it really helps put you in the driver's seat to have both. So perhaps that's a good long term goal.

But it takes years to actually learn to be an effective GC. You wouldn't want to hire a contractor with little experience on one of your projects, and that includes yourself.

Work with some contractors, do some research (@J Scott 's books on flipping are a great start) and learn what you need to know. But focus in the nearer term on building your business skills and making deals work.

Knowing both the general RE principles and practices as well as the local market are very valuable business skills. If you're getting the license for that reason, it shouldn't matter if you're a little shy. Besides, after a few successful deals you'll be to excited to be shy anymore. And getting a RE license takes far less time.

3 Reply

Elizabeth Colegrove

Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes

12y

@Kyle Webb

Personally I am not a general contractor or a real estate agent. Honestly I really enjoy just being a buy and hold investor. Not being a realtor gives me a ton of freedom. I get to be an "unknowing" buyer who try's "crazy" strategies. Just being an investor does not negatively impact my ability to manage at all. Honestly I think having good relationships with a good team is very important. They will teach you so much.

What is your goal?

3 Reply

Patrick T.

Specialist · Spokane, WA · Member since 2014 · 97 posts · 38 votes

12y

@Elizabeth Colegrove makes a good point. You'll note that I previously said that I had been a realtor. I learned a ton, made some really valuable connections, and now I know how to approach lenders, other realtors, et. al. I'm treated like a realtor, like a contractor, like an investor, all depending on which hat I put on. And I know how to manage the realtors I use because I know their world and their tools. And these days I can get almost any info they can.

Like Elizabeth, I like the freedom of not being bound to practices and paperwork. I also don't have to split any commissions with a brokerage But I gained invaluable knowledge.

So I would say get licensed long enough to learn what you need to know to pursue your goals. But don't get side tracked in real estate. You are an Investor! If, at some point, you feel that you don't need the license, drop it. No one can ever take away your experience.

1 Reply

Elizabeth Colegrove

Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes

12y

@Patrick T.

I totally agree with Patrick. I do recommend you be very careful and read up on your states rules. I have thought long and hard about forming my own real estate management company. Unfortunately right now that is not possible due to California's rules on being a real estate agent than broker first. It is not possible because it would strongly inhibit my ability to invest in buy and hold real estate. Buy and Hold's are my first goal.

1 Reply

Kyle Webb

OP

Portland, OR · Member since 2012 · 11 posts · 9 votes

12y

This is wonderful advice. I've never quite thought of what the education aspect of getting my license would provide for me; especially at the local level. In Oregon, the classes can be done online, thus it can be done whilst overseas. This allows me to gain actual experience (in credit hours). If I have learned one thing as the core beliefs of BP is that Experience > Education (in the guru class sense).

Thanks again Bill!

0 Reply

Kyle Webb

OP

Portland, OR · Member since 2012 · 11 posts · 9 votes

12y

Originally posted by @J Scott:

Hands down, I would suggest Agent over GC...
In fact, I'd go so far as to say having your GC license may even slow you down at first, as you'll focus too much on working IN your business as opposed to ON your business...

Holy wow..., J. Scott... this is kinda surreal as I was just reading your book on my subway trip home. I've been really devouring your books and must say it is the one of the best $50 I've spent. Heck, if they were $500, I'd still be praising your thoughts and meticulous detail you put into their creation. Your blog was what led me to BP originally and I've read through countless posts there. I know that " Estimating Rehab Costs" is more or less a reference guide, but I read through it as if was a novel.

Though I also forgot one thing in my original post. This is taken from Oregon's CCB website:

"Oregon law requires anyone who works for compensation in any construction activity involving improvements to real property to be licensed with the Oregon Construction Contractors Board (CCB). This includes roofing, siding, painting, carpentry, concrete, on-site appliance repair, heating and air conditioning, home inspections, tree service, plumbing, electrical, floor covering, manufactured dwelling installations, land development and most other construction and repair services.

A CCB license is also required for:

those who purchase homes, fix them up themselves and resell them."

This is also why I thought the GC license might be necessary, even if rehabbing is primarily my focus, not necessarily marketing GC services publicly. Is this unique for my state perhaps?

Thank you for your reply and advice! You are a huge inspiration.

1 Reply

Kyle Webb

OP

Portland, OR · Member since 2012 · 11 posts · 9 votes

12y

@Eric Blanchard Appreciate your insight. I know more detailed MLS access is invaluable, especially in a seller's market such as PDX. Pocket listings will also be to an investors advantage. The savings at both the purchasing/closings is necessary once the business can be upscaled. Thanks again!

@Corey Davis Ultimately, I see myself spending my days on site, planning to project manage, maintaing my budget and time scale with hiring subs. I like physical projects, using my time as my investment for everything physically possible. This will be initially what I envision.

Though, I ultimately know that most of my time should ultimately be used, like J. Scott mentioned, ON my business, rather than IN my business. That to make it scaleable, searching for the next deal will invaluable.

Being introverted in the sense of not wanting to necessarily get into Wholesaling/Direct mail marketing strategy of finding deals. Bandit signs with my cell number (or even a G+ directed number) on it seems like straight of left field knowing my personally type.

Thanks for your reply and advice!

@Michael Do Great advice! Really just trying to gain as much experience or knowledge ahead of time. I like the idea of perhaps initially partnering with a GC someday. I will certainly be waiting before any decisions are made. I only see myself investing in land, if anything as an absentee owner. I have a wild dream of spec building as a long term goal. TTM Development seems to be doing some great stuff in SE area.

@Elizabeth Colegrove When I think investor, I've always thought as a long term strategy. I assume with Buy and Hold, it makes sense to approach that strategy in certain cases. I'm looking for quicker transactions initially. I'm looking to be able to quit my overseas position to return home and begin making 'investing' work for my primary income. Getting started will be how I learn first what my end goals are, but currently my goals are knowing and preparing as much as I can today to limit my risk in the future. Thanks for your reply!

@Patrick T. Thanks for this advice! I really wanted to hear this from someone with your background. I think being able to "wear any hats" is what I want to be able to have after decades of experience, but I guess it seems that I can't fit which hat to try on first. Or I just want to 'wear all the hats at once'....even though, rationally my brain tells me that would be silly, but in my heart, I think "maybe I could pull this look off". I think, like you, having the insight and lessing my dependencies on others to do something for me is ideally what I am striving for. RE license seems the most approachable task to focus on now. Thank you for your advice to my post!

Thanks again everyone, this community is wonderful and I hope to contribute more to it when my knowledge and experience have more merit!

0 Reply

J ScottPro Member

Moderator

Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes

12y

Originally posted by @Kyle Webb:

A CCB license is also required for:

those who purchase homes, fix them up themselves and resell them."

This is also why I thought the GC license might be necessary, even if rehabbing is primarily my focus, not necessarily marketing GC services publicly. Is this unique for my state perhaps?

Thank you for your reply and advice! You are a huge inspiration.

First, thank you for the kind words...I sincerely appreciate that...

Second, my interpretation of the regulation you posted above is that you would need a license if you did any of the renovation work yourself, not if you were to hire out all the construction work. I could certainly be wrong in that interpretation (you should verify), but I'm guessing that if you don't do any of the construction work yourself, you don't need a CCB license.

It's also worth pointing out that some states give out contractor licenses like candy and other states it's much more than a formality. For example, in Maryland, basically anyone with two years of experience in ANY trade and who can pass a simple test can get licensed. But, in Georgia, passing the GC test required a lot of study, experience and knowledge, and I know LOTS of people who could never pass the test.

If the requirements in your state are very basic and you meet them easily, no reason not to get licensed...I'm getting my Maryland license because it's so easy...I figure it can't hurt...

Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)

0 Reply

Kyle Webb

OP

Portland, OR · Member since 2012 · 11 posts · 9 votes

12y

Originally posted by @J Scott:

Originally posted by @Kyle Webb:

A CCB license is also required for:

those who purchase homes, fix them up themselves and resell them."

This is also why I thought the GC license might be necessary, even if rehabbing is primarily my focus, not necessarily marketing GC services publicly. Is this unique for my state perhaps?

Thank you for your reply and advice! You are a huge inspiration.

First, thank you for the kind words...I sincerely appreciate that...

Second, my interpretation of the regulation you posted above is that you would need a license if you did any of the renovation work yourself, not if you were to hire out all the construction work. I could certainly be wrong in that interpretation (you should verify), but I'm guessing that if you don't do any of the construction work yourself, you don't need a CCB license.

It's also worth pointing out that some states give out contractor licenses like candy and other states it's much more than a formality. For example, in Maryland, basically anyone with two years of experience in ANY trade and who can pass a simple test can get licensed. But, in Georgia, passing the GC test required a lot of study, experience and knowledge, and I know LOTS of people who could never pass the test.

If the requirements in your state are very basic and you meet them easily, no reason not to get licensed...I'm getting my Maryland license because it's so easy...I figure it can't hurt...

First off BP is amazing... I can't believe I just had to ask a question and my inspirational real estate investor role-model would get back to me in a few minutes.... I'm blown away... Thanks you very much... wow.

"I figure it can't hurt"... This is what I was trying to so eloquently say, but couldn't quite say it like this in my first post.

Oregon seems to be in the candy dish side of GC.

Licensure consists of completing a 16 hour course, an 80 question, open book test (with 70% or above as passing), and about $500 when all is said and done. Testing seems to really be concerned with the Construction Business Practices, Safety/ Building Codes aspects, as opposed with trade skills specific information.

Something I could certainly study in advance for.

Thanks again @J Scott

0 Reply

Eric Blanchard

Specialist · Portland, OR · Member since 2013 · 96 posts · 19 votes

12y

Washington's candy, Oregon has a few more requirements such as continuing education and retesting.

1 Reply

Michael Do

Contractor · Tigard, OR · Member since 2014 · 30 posts · 25 votes

12y

@Kyle Webb As per the CCB requirments. I know they are up to interpretation. My understanding is someone can buy a house with the intent to fix and sell and if they use a licensed contractor for the licensed work. If you go in and need to only do cosmetics you don't need to get a licensed. A few years ago people were doing un-permited work to their own homes because there was a clause that said you can practically do anything to your own home if you live in it. This lost them the money they wanted and caused some safety issues.

1 Reply

Kyle Webb

OP

Portland, OR · Member since 2012 · 11 posts · 9 votes

12y

Originally posted by @Michael Do:

@Kyle Webb As per the CCB requirments. I know they are up to interpretation. My understanding is someone can buy a house with the intent to fix and sell and if they use a licensed contractor for the licensed work. If you go in and need to only do cosmetics you don't need to get a licensed. A few years ago people were doing un-permited work to their own homes because there was a clause that said you can practically do anything to your own home if you live in it. This lost them the money they wanted and caused some safety issues.

I believe it was Tucker Merrihew, of TTM Development who mentioned in the BP podcast (show 22) who mentioned this first. He many have stated that if you are doing more than 5 flips per year, it is a state requirement. I would like to work within the confines of the laws and I can't see myself being completely hands off to the remodelling phase. This is why I seek the GC licensure, especially if it is as easy as it many seem in the state of OR.

Usually workspace $500< is permit required... is that right?

Though, 5 flips per year is not how I think the 1st year's agenda will play out.

Thanks so much for your comment!

0 Reply

Michael Do

Contractor · Tigard, OR · Member since 2014 · 30 posts · 25 votes

12y

@Kyle Webb Perhaps the laws have changed from last time I looked. They do keep moving this around and its always up to interpretations. Luckily in the state of Oregon, 10 hours course work and a test and proof of insurance and bonds is all you need. You could probably invest about $2k to get your GC license next week if you wanted to. Sounds like it might be good to get depending on how many you do. I personally like the bootstrap method. Try one flip first before you go into getting all the licenses and such. See if it works and if you like it before putting a lot of time to get everything set up long term.

1 Reply

Karen MargraveBusiness Member

Moderator

Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes

12y

@Kyle Webb I am a licensed general contractor and real estate agent. If I had to choose between my licenses, I'd keep the contractors license. No, I don't physically work on jobs and I don't need to.

I agree with Bill Gulley and some of the other posters. Real Estate gives you a good foundation on which to begin building. Whether or not you want to actively work real estate as an agent, understanding the process has value in both real estate and construction. Learning the various contracts, lien rights, title, escrow, etc.is invaluable.

To be a good general contractor takes hands on work experience., and really understanding the building codes, types of construction, materials, layout, design and so much more. In fact most states require it as part of the application for a license, therefore; you will need to work with someone to get on the job experience.

If you are interested in building your own projects, or working on your jobs, many areas allow owner/builders to build houses (though some lenders don't) without a license.

The statement that you can easily hire a contractor is true, but also true is that you can easily hire a real estate agent. The question though is, what is your long term goal? If you can get your licenses, BOTH have a lot of value, however; a contractors license if you plan on being a builder, will bring you far more monetary value than an agents.

1 Reply

Patrick T.

Specialist · Spokane, WA · Member since 2014 · 97 posts · 38 votes

12y

@Karen Margrave I love all of your posts...and I would never dream of disagreeing with you. You're awesome.

When I look at which of my licenses (RE or GC) is the most critical to understanding investors and the investment world, I lean toward RE, even though GC is my first love.

For new investors I think the most important thing they can do is focus on investing, not getting sidetracked with another career or license. Forget the business cards, forget the LLC, forget what your parents told you, just go put some deals together! The licenses can come later, if your'e not too busy making money.

BTW I'm jealous that you're in my home state and I'm slogging through snow and muck here in Washington.

2 Reply

Karen MargraveBusiness Member

Moderator

Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes

12y

@Patrick T. Coming from you, that's a great compliment! I'm in 100% agreement with you on your advice to new investors. Licenses aren't necessary, knowledge is.

1 Reply

Zach Schwarzmiller

Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes

12y

Neither! They are both a nuisance. Networking and doing would be my vote.

2 Reply

Eric Y.

Investor · Denver, CO · Member since 2014 · 84 posts · 52 votes

12y

@Kyle Webb as a licensed GC who has a RE license (but hasn't hung anywhere yet)--I'd vote RE license. The RE license would have been more beneficial early on IMO. However, I already had years and years of experience as a GC and a license so that was a non-factor. To be an efficient GC you'd need to have more experience and knowledge than the simple test they give (at least, relatively simple). It is not a bad target to get it as well, but I'd go for RE first. Access to the MLS and being able to grunt work your own deal and be front line for all negotiations is absolutely invaluable. Your incentive structure aligns perfectly with your client's ;)

There is also the bonus of possibly getting some extra $$ from the realtor fees or getting rid of them on your side to make your offers that much more compelling to a seller you're attempting to woo.

2 Reply

Kyle Webb

OP

Portland, OR · Member since 2012 · 11 posts · 9 votes

12y

Thank you everyone for your advice and insight! This is a fantastic community. I'm sorry I didn't reply sooner. Thank you for taking the time out of your day to share your experience and knowledge!

@Michael Do The bootstrap method is exactly what makes sense. After a bit more research and listening to the "Real Dealz" Podcats with Portland Developer, Tucker Merrihew....it seems that if you are flipping and selling more than 5 houses per year in OR, you would legally need to have your CCB.. How that is enforced, seems misguided. A GC license would be a benefit no doubt, but something that is necessary right away.... I'm still undecided. I think it really depends on the formulation of the business plan I develop and how I best allocate my time. Ideally, I see myself wearing the hat of the project manager, not marketing out my services for hire. Discounts at Home Depot or Lowes alone in my first flip might be worth the $2k invest alone. I've got the time to study for it, but in June 2014, OR will update their Contractor's Reference Manual to the 11th edition. I'll wait until then at least for shipping it over internationally.

@Karen Margrave Thank you for your insight! I think, long term goal planning in the REI game is hard to predict. I'm flexible with my skillets and feel I could 'wear many hats' in the process. I think getting both licenses makes a lot of sense. OR might be far easier than CA for getting the GC license. Everything I've seen, it is a demonstration on the safety, codes, liens, etc.,,rather than the skill specific or experience bas. I'm not certain that is all to be required, but it is what seems to be stated on the GOV website. Interesting you mention about being able to work with lenders as a qualified GC on your own project if your property could qualify for the 203k loan. I will have to find out if that is possible in OR. I'm looking for monetary value of course, but also know I am satisfied with completing physical tasks more so than anything else.

@Patrick T. I think investing is my long term strategy, but see myself working RE as a scope of self employment initially. Rehab being something I do for experience and relatively safe gains... but more long term investing projects will come with experience and more capital to eventually be able to passively receive income whilst being automated.

@Zach Schwarzmiller Networking is or course the most valuable! I can only do so much living abroad though. I'm trying to focus of experience in the form of education. Working towards one of the two licenses seems like a sure fire way to work may way towards expertise on either end of the deal. The Buy/Sell/Acquisition/Marketing with my agents licence...or the Work Scope/ Management/Estimations/Liens/ side of the rehab business with a GC license.

@Eric Y. Thanks for you insight! I know that even with a GC license.. I would not necessarily be marketing myself as a GC for hire. The license is simple enough to get in my state with a couple hundred hours of studying (that I would want to know regardless of a license). I just see the majority of my time being on site rather than searching for the next deal. My goal is to double my buy/sell strategy a year. So depending on what loan rates look like in a year from now, I might only buy my first property under FHA regulations (3.5 % down, owner occupied, occupied for 1 year+). While the next year, try and do 2 with conventional loans... build up enough connections or lender support for the 3rd year, when I can flip 4 houses... Agents license would be great for the selling points in each of those deals... but I'm also into the idea of purchasing materials myself and paying subs for labor. In that strategy, a GC discount would be beneficial.

0 Reply

How you choose your REI niche/market?

How you choose your REI niche/market?

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