Is it worth becoming a real estate agent while flipping houses?

Question

Hello all,

I was recently referred here(BP) by one of my friends, so I'm just a beginner trying to learn as much as I can. I recently had shoulder surgery which put me at home for a couple weeks during recovery. During that time I started talking an online course to become a real estate agent. During this whole time, my wife and I decided to sell our house and buy a bigger one and fix it up, so that is currently taking up my time, not allowing me to finish the course. After some talking, my wife and I have agreed to get informed and pursue in the flipping/holding business.

My question is: Is it worth it for me to finish my course and to go through the certification and getting hired through a broker, just to save 3% on a house? Or should I focus on getting to know the business and start flipping, and then possibly get my license at a future date to cut expenses and maximize profit?

I see the benefits of using a real estate agent in terms of referrals and early listings and such, I'm just wondering if that outweighs the cost of using them vs getting your own license.

Thanks for your input, it is greatly appreciated!

Micah

Christopher Giannino · Answer

I'm sorry, I'm a little confused..  What kind of leads are you talking about?  If you finish up your course and sign on with a brokerage, you'll have access to the MLS which is where real estate agents look to see whats currently on the market.  If you're talking about off the market listings, you can always network with a couple of local real estate agents and wholesalers and tell them if they bring you these off the market deals, you'll give them a referral fee at closing.

Chances are when you're flipping a house the buyer will already know that the house has been flipped.  You'll want to advertise the listing as a newly remodeled house.  Also, real estate agents have access to a bunch of information so its really easy for them to connect the dots.  I'm curious though, if the buyer knows the house has been flipped does that change anything?

If you want to focus on one thing at a time that would make sense but I just think that ultimately if you plan on flipping multiple properties at once, it is beneficial to have a license.

Christopher Giannino · Answer

I think if you are planning on flipping multiple houses within a year it would definitely be worth while getting your license.  You benefit on the buy side by getting a commission which could make the deal better or it may allow you to pay a little more for a property which will make your offers more competitive.  On the sell side, you will list the property so once again you will get a commission (or only have to pay the buy sides commission) which will help reduce your costs.  Also, there are other benefits to becoming a real estate agent if you plan on flipping other then the money side of things.

Bikran Sandhu · Answer

Hey @Micah Kelderman, I'm in the same boat as you. I'm a beginner as well and am in the "learning" phase. Based on what I've read and understand the business so far, I will also be pursuing getting a license. When it comes to getting leads, I will be networking at local REIA groups and will offer referral/finder's fees for any properties to ensure that everyone who has skin in the game gets paid in the end.

Hope that helps!

Andrew Holmes · Answer

@Micah Kelderman

It's always good if you have a license. Makes things easier. Do you have to have it: NO but it good if you are going to a serious investor. Just give you more access to MLS, properties etc.

Ozzy Sirimsi · Answer

I think it is good idea when you are definitely ready to buy more than one house.

It depends on the state but it is not that expensive to hold an active licence.

Make sure you are in the RE business for the long term, and you are doing more than couple deals, then it worths. Otherwise you can focus on other things that you don't know about.

David Faulkner · Answer

I agree that it is a good idea to get your license. Not only for saving the commissions on the buy and/or sell side, as mentioned, but because it gives you yet another way to help people and another way to make money. You are going to be looking at a lot of property and talking with a lot of people. Not all of those properties are going to become your flips, or your buy-and-holds, and not every person you talk to is going to be a distressed seller ... but if you have your license, then some of them may become listings for you. It is also a much more ethical way to conduct your business IMO if you are looking off market for deals and you can be transparent with the homeowners by saying you can buy their property all cash with quick close for $X or you can list it for them for $Y but it will take longer and have higher transaction fees ($Y>$X), and you make money and help them either way ... so that way you are being honest and letting them make an informed decision on what is best for them rather than the perception that you are trying to rip them off and steal their equity.

Michael David Pagan · Answer

I am a newbie investor who just bought my first buy and hold rental property.  I was in the process of getting my license to help with real estate investing and opted out because of the expenses, and time required to be an agent.  If you aren't going to be an active real estate agent, the fees might be too high.  Of course this depends on your state, local market, brokerage fees, and how active you are.  It didn't make sense for me at the moment because it would take time away from my other businesses which bring me cash flow for real estate deals.

- Michael

Christopher Giannino · Answer

@Micah Kelderman

I would agree that buying a house isn't a bad thing..  I think nowadays many people would actually prefer a flipped house so that's why I would want to advertise it as such.

Best of luck and let me know if you have any other questions!

Micah Kelderman · Answer

Thanks for all your input! I have started to finish my course and hope to finish in the next week or two. I am going to focus on getting that and writing my test, and then on my first flip house I would be able to use my license for. I appreciate all your advice! Thanks again!

Kenneth Johnson · Answer

my wife is getting her license soon for purpose of our business and she does not plan to "clock in" as an agent each day.  That being said,  her license may not get used once a year or may get used several times... where is best place to park her license? Large broker,  small broker,  broker that specializes in this situation?

Is it worth becoming a real estate agent while flipping houses?

Most Popular Reply