Do I need a real estate license?

Question

Do I need a real estate license to do real estate wholesale? Adding on to that question. Would a real estate license help me understand wholesaling better?

Daren H. · Answer

Not sure about the laws in the state you plan to do business, but in a general sense NO you do not need to be licensed to be a great wholesaler. I am not a fulltime wholesaler, nor traditional agent, nor flipper. But I am licensed and I have done all three with success. I flip a few properties, I wholesale and wholetail a few properties , and I occasionally help someone find a new property (usually a family member or someone I am buying a house from), and I do a few buy and holds. I list my own flips and wholetails and save (or earn) $20-$30K a year for not much work because of my license. I help someone find a property and make $5K-$10K because of my license. I get access to the MLS and all sorts of comp and market data which helps me determine deals and my exit strategy. I can go look at listed properties when I want without waiting on an agent. Point is, the license pays for itself. It will give you some basic real estate knowledge, but nothing about investing, marketing for off market deals, talking to sellers, etc. Whole different skill set. I say it can't hurt but is not necessary.

David M. · Answer

@Amari Turman-roosa

https://www.biggerpockets.com/...

The above discussion is regarding the benefits of a real estate license, in general, that I thought you might find interesting.  Its been pretty lively.

As to your question, I don't think being a licensed agent will directly help.  Wholesaling sits "outside" of the regulated arena, sort of.  So, agents don't get involved with it.  However, you'll see in the above discussion how it does allow you to provide another avenue or option to your lead.  You can now wholesale their property or list it for them.

In my additional opinion, I think the licence provides some legitimacy.  When you tell people, whose property is in distress, that you want to buy their home, they tend to think you are trying to screw them.  At least actually being a Realtor gives them one way to "chase your down" so to speak so can give them some level of comfort.  Granted, some might say it gives people the the greater impression that you are going to screw them since Realtors, as salespeople, have a bad reputation.

It has been brought up that the licensing course is actually more useful for investors than agents.  The course work teaches you nothing about the job of being an agent.  It goes over all the regulatory and legal information and real estate related topics (e.g. easements, chattels, right of way, ways to hold Title, etc.) that you sometimes need to get into as an investor.

Just remember that while there is a cost to having your license active (I think its in that thread, but consider $2k up $3k annually) you can bring it down to nearly zero (about $100 annually) by putting it into a Referral status if you find its not useful or if you need to take a break.  Your license has to be hung with some Broker, so the Referral status is the common way to "take a break."

Good luck.

Jeremiah Fennell · Answer

Hey Amari,

To be completely honest, a real estate license will not hurt you in any way. It can only help your brand as a wholesaler. You will learn a lot more about the real estate industry that would benefit you.

Amari Turman-roosa · Answer

@Logan Vierstra That’s a good stance on the topic. I live in NY so I think I’m going to go for my license. I’ll start there since I’m still trying to figure out the wholesale world. Thank you for your feedback!

Zapata Tate · Answer

@Amari Turman-roosa

I have several agent friends who have no idea what wholesaling is about, so the short answer... No and no.

Logan Vierstra · Answer

Hi Amari. This is a pretty debated upon topic. There's a school of people who will say no you don't, and one that says you will. The answer is that it really comes down to where you live. Some states it is illegal to wholesale without a license, although I do not believe that's the case in most places.

It also depends on your priorities and goals.

For me, I chose to get it. For one, to cover my ass so that no one can accuse me of representing someone without a license, and secondly I wanted access to the MLS in my area.