In Phoenix AZ, do I need/want a real estate licence to flip?

Question

I would like to flip houses in the Phoenix area and was wondering if it's beneficial to obtain the real estate license?

The Big Picture:

About to start a full time engineering job at a local tech company. I will apply my free nights and weekends on extra curriculum activities (i.e. real estate and its derivatives). I have 10 years of construction background, either I know how to do it or who to bring to the table to help me get the job done. My salary is 90k. I have 20k in initial investment capital due to a hiring bonus but also have 120k in student loans (fyi: after much research, for me it'll be to invest first then to pay off the loans).  My goals are to buy, rehab,  and sell back to the market. Use all gains to pay off student loans which are at 7% interest rate.

Pros:

1. According to Marty Boardman (BP Radio Podcast 001), all Arizona flippers should get a license because other agents don't want to do the dirty work for you.

2. Save when selling or buying

3. Access to MLS, all raw data.

4. ------BP members add more------

Cons:

1. Time and money to get licensed

2. Other successful investors don't have a real estate license.

3. MLS can be access some other ways (i.e. diluted MLS via websites like realtors.com)

4. ------BP members add more------

All constructive criticism is welcome! :)

Thank you

Edgar

Bob Hough · Answer

I totally agree @Dick Rosen as having a RE license as an investor is not a must have. I think it comes down to more of a personal preference. Personally, as a real estate agent and investor, I think it is beneficial. It allows me access to MLS, can buy and sell without having to count on someone else to do it, and get commission discounts both buy and sell side, etc.

So is it beneficial, I would say YES. Is it a must have, No, all about personal preference at this point. Since you are just starting out and have a FT job, I would say work with an agent to start and then if your volume of flips, buy and holds, or if you concert to investing full time, then you should consider getting your license.

Michael Hacker · Answer

I would say that the number one benefit would be the ability to run your own comps and analyze the ARV on a potential project.  Make sure to look at netvaluecentral.com.  The subscription cost is about half of having your license and you will not have to go through the classes and licensing.  I am not a subscriber so I am not endorsing the product.  I've seen their presentations and it seems to supply all of the benefits of MLS access so it would definitely be worth investigating.

Bob E. · Answer

If you do get your license you will probably pay $1200 a year to maintain it and will be held to a much higher standard for disclosure on any work you do.

James Bynum · Answer

@Edgar Rosales In my honest opinion, starting out, I don't think you need to get a real estate license. I've thought about it myself sometimes, but it just doesn't seem to be worth the amount of money it takes to get and keep your license. Most of the deals we get are through wholesalers or deals we find ourselves anyway. This market is really tough to get good deals through MLS.

To sell, we use an agent that only charges 1/2 percent for the seller side and she takes care of all the paperwork. It worked out great for us! Took us less than a month to sell or most recent house through her, and sold 10k over appraisal.

It's really a personal decision I guess. Maybe when we grow bigger I'll go down that road, but right now I really just don't see the value in getting your license, but that's just my personal opinion. I see a lot of people smarter than I that say it's a must have. I just don't see it at this point. Especially since the market is supposed to increase over 7% in 2017, it will make it even hard to find deals on the MLS.

Brian M. · Answer

@Edgar Rosales

These are all very good pieces of advice and insight.  My partner and I each attended real estate  school and passed our AZ tests, however we decided only one of us would hang a license, granting  us both MLS access (very beneficial for comps) as well as some flexibility in terms of DNC lists.  The savings in commissions on our first deal would've been $12k had we taken this approach.  I'll be honest in that my experience with most agents we've interacted with has been lacking. Most are clueless about investing and even fewer will be willing do much leg work for a new investor.  We actually did source a deal on MLS and netted $43k when it sold in just three days.  That of course more than paid for school.  Does it happy everyday?  Not in this market.  But that's all the more reason agents will be less likely to spend their time on two unsure things; those being the likelihood of finding deals that close AND you, before you have a track record.

Kevin Ferris · Answer

Edgar, I have a license and I am always looking at properties.  I'm in North Phoenix.  It's tough finding deals right now that would be profitable.  I'm not sure MLS is where are the deals are right now.  The good thing about having access is that it's up and running 24/7.  I'm assuming with your situation, you're going to want to look at a lot of properties in order to find one that will work for you.  I find, having direct access is the only way to do it.

PM me.  I have some data on flipping in Phoenix that you may find interesting.  Anyway, good luck

In Phoenix AZ, do I need/want a real estate licence to flip?

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