Can attaining a RE license in any way be a detriment to a RE Investor?

[Richard Waterman]

This is a question I hadn't considered until a couple days ago, but here is why I ask it. I'm new to investing and want to start making money, and I'm also committed to learning everything I can about whatever I get serious about. So as a result, I decided to go to real estate school and get my license, which I'm scheduled to do next month. I figured, the knowledge will benefit me, I'll gain access to MLS, save commission if I want to buy a property, etc....But then I attended a REIA meeting the other day, and the speaker was a lady who was a short sale specialist. After the meeting, I was chatting with her and mentioned my plan to get my RE license, and she immediately said, "that is not necessary, and when it comes to short sales at least, it could even be a detriment, in that a licensed agent has to make all sorts of disclosures that a non-licensed person does not have to make". I didn't press for details, but it got me thinking. If I want to spend most of my efforts on the investing side of the business, am I actually hurting myself by getting a real estate license? I would like any licensed agents/brokers who are also experienced investors to weigh in on this issue please. What are the pros/cons of being BOTH a licensed agent/broker AND an active investor....regarding shortsales, wholesaling, rehabbing, or whatever topic you would like to relate it to. Thanks for the input.

[Mike Henderson]

It was almost a year ago today where I was going through this same dilema. I guess one of the questions is what are you doing for your current source of income. As they say in a lot of industries, don't quit your day job. Everyone has their monthly bills; where you live, what you eat, you've got transportation costs etc. How are you meeting these bills. I would not want to do this as purely an investor, unless you have 10 plus cash flowing properties currently. This is the first question I would ask you.

I'll give you the pros of getting your license.

Education: I believe the knowledge you gain with a real estate license is invaluable. Let me stress the knowledge from the actual real estate license is good to marginal. I can only give direct knowledge of the state of Colorado, but it seems to be the same everywhere. The person who compared it to a 3rd year college education, I say no way. It's marginally above high school if that. In Colorado, it's about 160 hours of work. LOL, I'm supposed to know this for the test. How is that supposed to help you in a real estate transaction? While you certainly get a basic education it does not help with most investor related issues and topics.

It's the ongoing education: Next week I can attend for free a four hour course about the HUD homebuying process. If you are interested in purchasing HUD homes as an investor there are a lot of little tricks. Do you know if you overbid on a HUD home you need to bring that cash to the table. For those of you who think it's worthless a fellow agent at my company purchased a HUD home, went 30 K over asking. He was doing a flip. He missed his budget, he ran over 10-20 K. His net profit after all closing, holding, etc. was only 80K. He had it sold in 90 days from the date he bought it to sale. It was under contract after four days on the market. It opens the door to all sorts of additional and ongoing education. That is where the real value in learning is.

The traditional advantages: mls access, squeeze the cost, showing properties etc. These have been addressed by different people already and what initially attracts people to do both.

Networking advantages: This is in my opinion the biggest reason to do this. It is easier to talk to most people when you are a real estate agent. When I go to an REI it is much more useful to me as an agent. I may not be able to work with these people as an investor; we have different models, there deals are to thin, etc. As a real estate agent I do have the opportunity to monetize the relationship. It also makes them more willing to talk to me. It opens doors!

Internal networking: This is the most overlooked aspect and I have not seen anyone mention it in this post. It is the ability to network with your fellow agents that can make a big difference. You can pretty much work with one agent as an investor. I have the ability to spend time with a ton of successful agents and learn what they are doing. Here is a profile of just 3 in my company. Names have been changed to protect the innocent

The Ouzo drinker - I'm guessing he has over 30 properties. As he says it's none of your f'n business. He raises a ton of private capital. He buys notes.

The crazy brit - College and liberal arts educated. He is an expert at fix and flips. He is the one who made 80K on the last one. He has another one this weekend, I get to do the open house. Talk about a great way to get a profile of what the buyers look like and feedback. It can't be beat.

The Godfather - The person who owns the company. He owns 140 doors of rental units. Can I learn more from him or from a course with coaching?

The developer - He was involved in all types of development deals. He moved over to residential about a year ago when the market changed. He also had a baby and the quality of life became more important than the constant travel.

I have a great network that I would not of had access to without joining this company.

MY ANALYSIS OF YOUR DECISION - We kind of did it backwards. When I was wrestling with this decision a year ago I got feedback from the Bigger Pockets board, and was still unsure. I went out and started interviewing for real estate jobs.

The most important decision will be the company you joing It's like law school, the firm and mentoring you receive will be more important than the education you get. I found a great firm in Denver, Your Castle Real Estate. It specializes in working with investors. We have 200 agents. About 1/3 are investors themselves.

Figure out who or where you would work for and then answer the question of to get your license or not. For all the people who are negative, I see your point. Think of getting your RE license the same as spending the money on a guru course or a coach. It's cheaper than a lot of coaches and better than a lot of courses. (That's a different topic and I share the viewpoint of MikeOH)

If you've got a job with benefits paying more than 60K stay the course. If you're working at Starbucks, probably smart to make the switch. Don't go into being a real estate investor without a source of reserves, alternate income (wife working, living with your parents can count.), or a lot of capital.

This is not a get rich quick game.

If not for the company I joined I'm not sure I would of gone down the path I did for getting my license. 50/50

Feel free to contact me direct if you have any questions.

P.S. If this helps I'd love a thumbs up. I don't have a single award yet

:cry: