Whether or not to get REA License

[Michael Rudd]

Hello everyone, this is my first post to BP, after reading about 5 hours a day for the past few weeks on every article/blog/webinar/forum post I can.

My immediate concern and reason for this post is: Should I get a real estate agent license for my state now/later/ever?

Here is some background info, hopefully in the goldilocks zone of information (not too little/much).

I'm about to get started in this fascinating world of real estate, specifically "passive" income via buying and renting houses. My "9 to 5" consists of 2 weeks on, 2 weeks off (VERY far from my investment state), that pays well for a recent graduate. I will be using this paycheck as well as partnering with a friend(s) to buy rental properties.

We have enough to buy our first property and I am faced with the dilemma of whether or not to get access to the MLS database.

Utah requires 120 hours of training to get an agent license, but I cant seem to find out whether or not that grants me access to the MLS, or if I have to join a brokerage to get access.

The 120 hours is nothing as I have two-week stretches of time off (perfect for finding deals, etc). The problems arise when I can't fulfil my duties to a brokerage (if I need to join one) because I am out of the state half of the time.

I wanted to ask these forums as I have seen some great advice, before risking (potentially) incomplete information from schools/brokerages that might just want my money.

[Paul Timmins]

Michael

Getting training is never a bad thing. You can get it to understand the procedures better but not get licensed. Access to MLS could be through a broker/agent functioning as your advisory team member. A 10 second loop created by the broker with your criteria sends you a daily email anything fitting the criteria.

MLS is merely 1 way to find properties. Realtor.com gives you access to MLS listings. Zillow.com is also a good resource to find deals.

Your focus is to find deals to make profit, not do work for the broker/agent.

3 Different local REIA clubs will be a great source for deals, resources, people and info.

Just my 2 cents, good luck.

Paul

[Sandra K Shirah]

I absolutely love having access to MLS as a RE Broker. However, there are a lot of fees involved...

For instance to gain access, you must join the Board of Realtors. It's roughly $600 in membership annually, $200 initiation, plus $50 a month for MLS, electronic key rental $16 month... I'm not sure of the laws of Agency in your investment state, but new licensees are usually required to be sponsored by a broker the first few years. The broker may or may not charge their own set of monthly fees...commission is paid to the broker, who keeps a %, before passing on to you.

To avoid that hoopla and focus on investing, It may be best to team up with a broker whose already a member of the board as an earlier poster suggested. I have an investor that offered to pay a portion of my board fees-I run CMAs for him on listed and FSBOs, set up auto email notifications of properties meeting his specifications, etc. Works out great for us.

[Bryan L.]

@Michael Rudd - "Duties to a brokerage"?

You obviously don't understand how the system works. You can become a licensed real estate agent through your state. Your license will have to "hang" at a brokerage (whether you become a Realtor or not). Brokers who are Realtors will probably not accept you unless you are also a Realor (unless they have also set up a separate "referral brokerage"). Your next step, if you choose, is to become a Realtor. And then, your license will most likely have to be hung with a brokerage who is also a Realtor. Now you have MLS access (for a fee). On the "duties to a brokerage" thing - there are many brokerages that require nothing of you at all. Actually, they have duties to you. Your broker has the duty to provide you with a place to work (at least a desk if not an office), and also has a duty to supervise you, which should include some amount of training. Then they have a duty to split any commissions with you. Some will require you to pay a "desk fee", others will not. Some may require you to do "floor duty", others will not. My point - there are many brokerages that require nothing more of you than to pay your MLS and other fees (which you will have to do anyway), and to stay current on your E&O insurance (which you will have to do anyway). As a Realtor, you are about 99% self-employed. YOU choose when you want to work and how much (or how little). There is nobody requiring you to list houses or haul buyers around in your car or hold open houses or anything like that. There's really no reason not to become a Realtor. Sure, you will have some costs, but you will make these up (and more) with commissions on your own deals.

[Nuhan Demirkan]

Hello Michael,

Welcome to the world of R/E investing. It is exciting and rewarding. I have a license and must tell you that it gives immense control over my deals. I can do my own research/analysis, negotiation and write my own contract. Make net offers eliminating sales commissions. But most importantly being a "Real Estate Professional" gives me tax benefits others do not have. I can deduct for expenses such as home office, car/mileage, cell phone, internet expense, dinners, etc. My total cost of having a license in my state is around $2,000 year and I easily get that back in tax breaks. You can find an investor friendly broker who won't require anything, won't split commission on your own deals as long as you are current with your expenses. And if friends or family need an agent you can help out and collect the commission. If done right, it is very beneficial. I highly recommend it.

Good luck,

[Jen Bowen]

good responses here- probably best to connect with an existing local Agent/Broker to help accomplish your goals for a fraction of the time and money it would take for you to get your license. A least for now.

I happen to be an Agent (imagine that!) and would be happy to help.

[Michael Rudd]

Thank you Paul, Sandra, Bryan, Nuhan, and Jen.

I think I may just be overestimating the difficulty of getting a peek at the MLS. I just haven't seen the information I want from Zillow or Realtor.com (mainly multifamily sq. footage vs bedrooms vs units so I can calculate rent off padmapper, ect). I'm also not as versed in checking through the property tax databases as I should be.

I got the "Modern Real Estate Practice" book that was recommended from somewhere, and if I get nothing else from it, the terminology should become familiar.

As far as getting my license, I am a big fan of controlling all the deals I haven't made yet but what do you guys think about the timing? Should I jump in and do it, or just get my license next year with a couple of houses under my belt with contracts not bungled by a newby?

Thanks again, I always welcome data.

[Ali Boone]

It definitely can't hurt! It also takes out any question of whether it's legal to get paid for various things, like referrals and such. If nothing else, get the license and if you never use it, let it expire.