Do I need a real estate licence???

Question

this may be a dumb question.  do I need my real estate  licence  to wholesale  and flip houses?  if not would it be a good idea to get it anyways?

Ned Carey · Answer

No you do not need a license

I did my most profitable deals before I had my license and access to the MLS.  I latter got my license and found it of little value to the way I do business. I have since given up my license but I still do have access to the MLS as an assistant to an agent.

MLS access is much more important than a license. Good luck - Ned

Rick H. · Answer

I've had a broker license for well over twenty years and found it to be useful.

Derek W's argument in favor is the most compelling reason. I've personally had many, many years where I've enjoyed an additional $100k net income from referral fees by possessing a license.  These funds were mostly invested back into my marketing budget which, in turn, continued to generate more leads. I call this Dealflow Referral Income and continue to benefit to this day.

Possessing a license as never presented a conflict when transacting for my own portfolio.  Despite others' erroneous insistence, I do not have to disclose my license status to a seller however I do, although it ought to be a non-issue. Your state (Utah) might be different in that respect.

All this being said, I have discouraged others from obtaining a license when starting in real estate because there is so much to un-learn from the test prep experience that the newcomer may need to recover from.

Paul Timmins · Answer

Nathan

Having a license and putting in on a deal means split commission for the listing broker not a good thing. Get a person with MLS access to give you what you need for free. Provide referral listings to that broker as payback.

You cannot underestimate the benefit of training. I know buddies who took the class with no intention of getting a license.

There are NO dumb questions only ones never asked.

Paul

Nathan Ewert · Answer

thanks ratho,

Dont worry about rambling haha. I do that all the time. I'm going to take your advise and check out the local gatherings and talk about my goals. I just didnt want to go and have no clue of what i was talking about.

Ratho R. · Answer

Hi @Nathan Ewert .

As you can see this is not an easy topic. If you go through the podcasts, you will hear that question come up all the time and there are as many different answers as there are investors. I do wholesaling as well as referrals to my wholesale mentor. The bottom line I would say is that it depends on what you want to do. You need to start out with a business plan and find out what you want your niche to be. That has really helped my focus on how to move forward. Networking can  solve a lot of problems that you would run into without having a license. If you don't want to deal with people and want to do things on your own...then get out of Real Estate! haha. Just kidding, you can see some people have opened many doors by having a license.

I would offer this advice. Start out without one, identify and lock in your target market and niche, then start moving on it. If you find all works out without a license, then you saved a lot of time and money, if you are hitting a lot of road blocks, then look into getting a license.

Also, NETWORK! Here on Bigger Pockets, but also in your local area. Google "REIA Provo, Utah" Or another major city close by. Go there, meet people, hand out cards, and you will get the ball rolling. Just be sure you have your goal in mind so that you can specifically tell people what you do. Ask this "What do you do?" and think about the best way to answer that. If you show up and say I want to make money and have nothing specific to that effect...then you will not be remembered. If you answer "I am advancing in wholesaling/flipping houses, and building my network." That would give them a better idea of how you could fit into THEIR network.

Hope that helps! I have a habit of rambling in posts.

Account Closed · Answer

I wouldn't attempt this until you are sure about what you are doing, having said that, you can do the forms for a wholesale deal yourself because you are a principal in the transaction.  You need to know the laws in your state, there was a post here on BP recently saying their state requires a license.  Doubtful you will find an agent willing to write a wholesale deal, their liability is high and their payoff is low.

Nathan Ewert · Answer

that's  great information!  one more question now that you mention  forms.  when I go to close a deal with letss say a whole sale. Do I  fill out the forms or does a real estate agent  do that?

Account Closed · Answer

I agree with pretty much everything you said except the part about agents learning the forms, the problem is that they don't learn most of the forms,  the only form they do learn is the straight purchase form (RPA).  There are standard CAR (California Association of Realtors) forms for straight purchase, NOD purchase, AITD, L/O, Straight option, seller financing and others.  The only form I don't see is one for buying subject-to existing financing, which could probably be overcome with a simple modification to the "assumption" clause in the seller financing form.  I've had to teach the NOD purchase form to at least two agents making offers for me so I didn't go to jail, yes, it's true, investor can actually go to jail in CA if agent uses the wrong form, not the agent, the investor, very rare however, not much to worry about, I don't think anybody has ever actually gone to jail, but the law does provide for it.

Rick H. · Answer

My primary beef with licensed agents is their insistence in using real estate association forms.  Much if this is the result of constraints by their brokers or the E & O insurance providers.

Consequently, people become "form driven" rather than deal driven.  It's a pet peeve of mine because licensees become much less inclined to find creative solutions when they have to color the picture and stay within the lines.

The other point is that the training is designed to help you pass the exam, not do the business.

Alas, many learn the forms by not the business.

Nathan Ewert · Answer

thanks for the input!  What kind of things are you talking about that I'd have to UN learn from the  test prep?

Do I need a real estate licence???

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