Flipping Houses: Is a Real Estate License necessary?

[Juan Diaz]

Let's say you are a new real estate investor who is interested in flipping houses. You may start wondering, "Can I flip houses without a real estate license?" If you are one of these, you are not alone. This has been a common topic in the real estate industry.

The truth is, it is not mandatory to have a contractor's license in flipping houses but most investors find it very useful. The decision still depends on you whether you want to grab its advantages or not.

To get your real estate license, a real estate education authorized by your state must be completed. Different states exercise their own regulations concerning what permits and licenses are necessary to flip homes and that the investors should research and know what type of permits and building requirements are enforced in the area. This is one of the reasons why obtaining a license is useful to investors.

(featuring my project at Eastman Ave)

Advantages of a Real Estate License

By having a real estate license, you will be granted direct access to the MLS which simply means you'll get more and bigger savings when buying properties for your real estate investment. For example, you can easily save $3,000 when purchasing a $100,000 property.

Not just getting the savings but you can also list your properties on the MLS for free. Thanks to the real estate license! MLS is so powerful that it is accountable for around 80% of SOLD properties and dominates other marketing platforms for house flipping.

Another good part of getting a license while flipping houses is that agents can legally pay you referral fees.

What does this mean? This means that you can coordinate with another licensed agent, let him do the work, and you'll get back the real estate commission. This will add more to your cash and of course, profit.

I have a Real Estate License, what can I do with it?

If you made a decision to get a real estate license, congratulations! It will expand more of your professional possibilities and boost business opportunities in your real estate venture.

Here are some of them:

Broker – A real estate broker is a licensed individual who manages his own team of real estate agents.

Sales Agent – Obtaining a real estate license gives you the right to assist homebuyers and sellers in buying and selling a property.

Leasing Agent – You can also serve as a leasing agent or a property manager who handles residential and commercial properties.

What are the Top Benefits of Getting a Real Estate License?

• Additional Revenue Stream

Extra income! In addition to making money through property investments, being a real estate agent will add more to your cash flow. Having a professional license will definitely help you in the long run and supplement the earnings you make in flipping houses. What's great is that the commission you get can be used to fund your next flip.

• Easy Access to Deals

Not all deals are on the MLS and posted on website's listings. The truth is there are plenty of deals that you have never known existed! This is more than just having access on the MLS. With a real estate license, you can connect with every outlet and build a network. This means that if there are any deals, you will be the first to know rather than waiting for the updates of a realtor. Therefore, you can save more time in finding your next flips.

• Increase your Network

Your real estate license adds to your reputation and credibility. This opens new doors to various networking events and increases the "word of mouth" which will make people know more about you. Successful investors network with like-minded people and as they connect with others, they find new deals and grow their business.

• Education

Getting your license means you have to meet certain requirements and educational criteria. Through this, you will learn a lot and add more to your knowledge and experience. This will fuel up your real estate investing career.

• Commissions

Since you can function as a realtor, you can save money for every transaction. The average commission that an agent receives is around 2.5%. Assuming a $200,000 purchase, you will have to pay $5,000 to the realtor. Again, thanks to the license. You can save that amount of money!