Are there benefits of becoming a RE Agent as an RE investor?

[Jackie Badiali]

I'm new to real estate investing and was considering getting my real estate license as a way to increase my knowledge of the industry and also my exposure to deals. I want to invest in real estate for retirement reasons and also TAX savings reasons. I heard from my accountant that RE agents are considered RE professionals and therefore don't receive the same tax advantages as a RE investor. The structure is different. I'd love some feedback so I can make a decision.

Thanks for your input.

Jackie

[Steve K.]

@

Yes, it can be valuable to be licensed.....for making your own deals more profitable.

I have a full-time career and have just been doing part-time REI for 5 years. I'm now licensed....but I will never work "retail" as a broker....just representing myself in each buy/sell.

I have good income/credit, and my day-job is demanding....so, I embark on larger fix/flips and building high-end spec homes, but I'm saving a bunch by being my own agent.

My first project 5 years ago was buying a $200k pre-forclosure (short sale) ugly duplex in a hot part of Denver. After tripling the size of each unit, essentially new homes, I sold the two halves for $1,200,000. My margin was excellent....but 2.8% went to two Buyers' agents and 2.8% went to my listing agent. These 3 agents made more ($67,000) in 1 month than my contractor made for overseeing the project for 8 months. I thought there must be a better way.

Since becoming my own agent 9 months ago, I saved/made 2.8% on each transaction:

• $12,000 on buying another flip property
• $42,000 on selling my $1.5MM spec home myself
• $16,000 on buying my latest scraper lot

If/when you're comfortable representing yourself, it's a logical step to consider.