Should I get my real estate license?

Question

Hello,

I am new to real estate and am curious about obtaining a real estate license. My goals are primarily to invest in real estate, but have considered getting my real estate license in order to gain experience in the real estate world. I have also read that there may be some perks to having a license when investing (saving on closing costs, access to MLS, etc.)

Any advice or thoughts are greatly appreciated!

Hamp Lee III · Answer

I recently received my license, which has been a game-changer.

Being an agent allows you interact with a lot of investors, expand your knowledge, make a little money, and grow your portfolio. (I'm a part-time agent.)

Think about it like this: a family may purchase a house and live there for a few years unless they are military. An investor will buy a property and once it's rehabbed, will look for another...and another...

As an investor, you can speak to the importance and power of real estate with all clients. Plus, investors are less likely to be concerned about the color of the walls. 😉 I can also search for my own deals on the MLS and use investor tools such as PropStream to help.

Becoming an agent has been a great experience. I wish I would have done it sooner honestly. I can thank my daughter for that one (she's 26). I wouldn't have done it without her encouragement.

I hope this helps. Let me know if I can help further.

I wish you all the best.

Bruce Lynn · Answer

My thought is...just take the classes to get a better education, but you don't need a license if you're only going to do 1-2 deals a year.   It's expensive to maintain and if you're just doing a transaction here and there, most people probably are more dangerous with it, overthinking they're doing themselves a deal.  I mean you could go get your mortgage license, and and insurance license, and an inspectors license, right....but if you're only doing one or two home inspections a year instead of one or two a day, or a loan or two a year, verses 3-4 a week, you're probably not going to be that good at any of it.

I'd only get it if you plan to sell to other people....maybe 10 or more a year....that's probably the basics of staying competent.   To me real estate is a team sport...get people on your team who are the experts....and you're the conductor...or the GC....GCs do the same thing....they don't go get a master license in each discipline....electric, plumbing, HVAC, etc....they just run the show.

Kyle Kline · Answer

Thanks for your input! It’s very helpful to hear opinions from both sides. I guess I would be concerned about trying to find an agent who would be willing to work with someone who has no real estate/REI experience, so having my own license would allow me to avoid this and also gain some experience in the real estate world. But I can see where the cons you brought up may be a hindrance in the long run.

Kyle Kline · Answer

This was my main concern, as I heard the fees to maintain the license are costly. But, as you said, if you put in the work these can be offset. Thank you!

Ian Hooper · Answer

Do you want to sell real estate? Do you want to represent buyer and sellers in their transactions? If not, then a license may not be what you need. Have you looked into what it takes (education, fees, expenses) to obtain and maintain a license in your state? Weigh those costs against how much you want to do activities that require a license in your state.

I got my license after doing 6-7 deals of my own. I was transitioning away from a career in public education, and got licensed so that I could help other people and earn commissions in between my deals. I honestly can't say that my license has helped me as an investor. I know for certain that my experience as an investor helps me represent my clients.

Kyle Kline · Answer

Very helpful, thank you for your time in replying!

John Adrian Dobson · Answer

I completely agree with @Hamp Lee III getting my license was a massive help, and quite frankly I have no idea how some many investors get by without it.

The biggest thing for me is the access to sold data. I can literally go through almost every flip that's happened in every neighborhood in my city and figure out what the spreads are, where the opportunity could be.

Also when I receive calls from off market sellers I can have a good idea about what they could list for, what a direct offer would likely be, and then work through the options with them in real time. Most wholesalers I know that don't have their licenses have to wait hours before they get comps and many just go into offers blind with nothing but honestdoor or tax pricing for the house.

Kyle Kline · Answer

Thanks for your input! I do not have a desire to sell real estate, my only aims in becoming licensed would be to potentially gain experience for investing and have access to some of the benefits of an agent. So I appreciate your perspective on not having experienced much benefit in being licensed from the investment standpoint.

Shiela R. · Answer

@Kyle Kline hi there.  I'll chime in on why not to get your license.  Depending on your strategy for buying, it may be best to be able to say you are not licensed to sellers who feel they can't or don't want to pay commissions. In case you didn't know licensed agents must disclose the fact that they are licensed ASAP when meeting a new person and discussing their real estate transaction.

I am licensed now but was not for the first 4-5 years I invested.  I did pay for a mentor who taught me how to market and talk to motivated sellers (not in the MLS) and saying "no commissions" was invaluable. Now that I am licensed I say "I am licensed,  However, no commissions will be paid because this is for/within my personal RE portfolio."  Off market deals are usually a better buy, but not always.

You can always get to know a good agent who will want a long time relationship and who will be willing to reduce their commission bc of the volume. I bought and sold mostly HUD homes to flip at the time. Plus there are other sources for information about properties.

If you want to have your face on bus benches and sell retail (through the MLS) getting some experience under your belt with transactions is invaluable. I maintain my license but only work on referral and for my own deals.

Should I get my real estate license?

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