Is really worth it to get my real estate license?

Question

Hi everyone! I'm new to this and have been considering getting my real estate agent license for a couple of months. My main goal is to invest in real estate in the future, but I want to understand how everything works first. Many people have recommended starting as a real estate agent and then moving forward from there.

I have a few questions: How has your experience been? Is it really difficult to start? How long does it usually take to earn your first commission? Is the new percentage of commission worth it? I'm currently working full-time and making $60,000 a year. Is the market too saturated for new agents? I really appreciate your honest opinion, Thank you.

Tim Emery · Answer

@Luis Puente Becoming a Real Estate agent is a full time job if you want to be successful. Depending on your network it could take 6+ months to get your first deal. If you are looking to be an investor, learn how to be an investor first and then get your real estate license. Taking classes to learn how to be a real estate agent really just teaches you the laws and how to pass the test. Once you pass, finding a good agency that will teach you how to be an agent will be important. They most likely won't teach you how to be an investor. Find a local REI, meetups and networking events. There are a lot of events this week in Denver.

Bruce Woodruff · Answer

I had a RE license as an Investor/Contractor and never saw that it saved much money (My experience anyway) People think you save 2.5 - 3% on every deal because you don't pay a Buyer's agent.....but most sellers are not dumb and will not automatically 'give' you that money, they will either expect that they keep it or maybe work out some kind of a split.

So if you are just going to be an investor, there is no way that it is worth the cost (IMO)

Bruce Woodruff · Answer

Only if you paln on helping other people buy and sell properties. It has virtually no value to you as an investor. If you just want the knowledge, sure, take the online classes and tests. But there is nothing like real world transactions to learn for real....and to do that you'd need a Broker and you'd take on all of the overhead costs. It'll take you a while to replace your $60k income...

Assuming that you make 2.5% per deal and pay your Broker 1/2, you'd need to buy/sell $5,000,000 worth of properties per year to equal your current salary. Actually more becuase now you are self-employed and have all of those pesky overhead costs. So really more like $6MM per year of deals. Do you think you can do that?

Caleb Brown · Answer

Not worth it unless you are going to build a business around being an agent. If you had a ton of capital to invest then maybe that's different. It is a weird market currently for being an agent. I have noticed Q3/Q4 strong but it's still competitive, many agents are struggling.

Andrew Myers · Answer

Hey @Luis Puente! These are great questions. I would start with your short and long-term goals. Sounds like you have some long-term goals around being an investor. I agree with many on here that you don't need a license to become an investor. Being an agent can save you $$ if you are a flipper or someone doing a lot of your own deals in your local market. But it also costs money so if you're not doing any deals, it can start feeling expensive.

Now if you want to quit your full-time job and do this full-time, that's different conversation. Being an agent is a job...it is a sales job. You provide a service (offer), you find people who need to buy your service (leads), you need to close them in order to get their business. There is plenty of agent competition, in Denver especially. So it can feel like a grind - it's a grind that I love personally, but that's not always the case for some people. I work way harder as an agent as I did in my 18 years in my past corporate jobs, but I love it way more and am 100% engaged in the work and my clients' successes. I'm also a full-time investor. If anything else, being a side hustle investor helped me be a better agent, not vice versa.

All that said - start with your short, medium, and long-term goals, map it out and then take action based on that! Good luck!

Chris Bounds · Answer

Having a real estate license is NOT required to be a successful real estate investor.

IMO, it can help though!

Direct access to MLS data, multiple solutions for sellers (off market cash deal or listing), ability to rep. yourself on your own deals (saving on commission), and of course, education & networking.

Having a license costs $$$ though. If real estate is a long-term journey for you, go for it. If it's a part-time investment hobby, then it might not make as much sense, financially at least.

Erik Estrada · Answer

It depends on your state laws. In California, it really does not make any sense for an investor to get their license. You have to disclose everything to the seller if you are planning to buy the property for yourself to flip or to wholesale the deal.

I think if you really want to gain exposure, start with lending or title work. If you know the bones of the transaction, it will definitely benefit your investing career. You may also want to consider becoming a GC. I think learning how to improve a property is  even more important than being on the sales side of real estate.

Mohammed Rahman · Answer

Hey @Luis Puente - the reality is, the answer depends on you.

If you're using your real estate license as a means to make the same/more as your W2, then you will face an uphill battle - unless you work extremely hard.

In most cases, new agents lose money for the first few years (considering the amount of time/work it takes and the payoff).

It's a great tool to learn more about real estate though, and help you decide whether or not a full time career in this industry is for you.

Is really worth it to get my real estate license?

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