Limited Broker license in Minnesota?

Question

I have bought 6 properties this past year that are buy and hold. Looking to keep buying buy and holds but also doing flips. Does anyone in MN have your limited broker license? If so how has it helped you? Should I just get my realtors license and go with a broker in the area? My goals in getting this would be: save on commissions, faster getting into houses to look at them instead of waiting on my realtor and make offers faster. Any thoughts?

Brian Wagner · Answer

I have used a limited broker's license in Minnesota.  It is a good way to save on commissions although getting access to listed properties can be difficult if you do not have full MLS access and access to the electronic lock box system being used by lots of realtors.  I would research how to access the MLS and the electronic lock boxes as those two items will be key in quickly gaining entry to the properties and writing offers.  Otherwise you are stuck calling or emailing the listing agent which can slow the process some.  You will also want to make sure you have the appropriate legal documents for transactions and are familiar with them (if you aren't already).

Shane Hedeen · Answer

@Eric Mayo hit it right on the head there. The one thing I would add is all the other fees you are talking about running into beyond licensing and renewal. IF you are buying MLS deals then you'll tack on MLS access, E-Key access if your area of MN primarily has agents that use that, which is not a big cost but another little piece.

Based on what you've stated, I certainly think it's worth looking into for your scenario. You're doing exactly the right thing in starting with BP to learn a little more about other people in your shoes! Just know what your costs are going in so you can budget them into your business plan, whether you go LBL or Salesperson License.

If you have a realtor you trust up in that area to talk to about your decision, they would have a lot of insight about the brokerage they work with and maybe others to help the vetting process. Best of luck @Miller Josh! Thanks again for sharing with the community.

Eric Mayo · Answer

@Miller Josh, I would look at it this way. Are you ever going to do a deal (Buy or Sell side) for anyone else (not for you or your company, however you title your Limited Broker License)? If not, for the LBL you'd pay $180 for the license and $120 for renewals. You don't have to take the 30 hours of classroom education, a test or complete annual continuing education (Big $$ Savings!!). You can also get full MLS access by joining the Realtor Association as a Limited Broker. On the flip side, getting a RE Salesperson license would allow you to assist anyone in a transaction. You do pay $115 for the license & tech fee and $60 to renew the license every 2 years, however, as said earlier, just to get licensed you have to take a class, take the test and then complete continuing education every year. Once you associate with a broker, the company will charge monthly fees for voicemail, MLS access, website, and the privilege of saying you work there. Think somewhere around $125-150/month to start. Now when you complete a sale (either Buy or Sell) you'll give up at least 10% of your commission to the broker plus pay E&O fees, etc of close to $50 per transaction.

So in a nutshell, if you are only going to be buying & selling for your investments only, go with the Limited Broker License.

Shane Hedeen · Answer

@Miller Josh,

There are a lot of great comments already to your post, so I'll try to add my own two cents as I agree with everything that has been said above. I don't have a limited broker license, and am an agent working for a broker. I will keep my comments focused on that, as I'm not an expert on all the rules and regulations with limited broker license.

In your buy & hold investments, your huge advantage of having a license and full MLS access is your ability to get into homes, write offers quickly and serve yourself. You won't gain much financially for the properties you just buy, as those commissions aren't directly coming out of your pocket as a buyer, they come from seller. That said, your license could gain you leverage to waive the buy side commission and lower price by that percentage, or pocket the commission and put back into investments. Not a bad move either way.

If you are flipping, then I think there's even more advantage to yourself as realtor. Depending on your broker, you may be able to waive your own commission on the sale. Worst case if that's not allowed, you can obviously get most of that money back.

Based on what you did last year and are looking to do moving forward, it could be a big plus for you as an investor. That said, there is certainly work that goes into repping yourself to save the money. Best of luck as you contemplate the decision! Thanks for sharing.

Andy Schornack · Answer

My colleague and I have used it successfully to do transactions. It is an extremely efficient use of capital for experienced real estate investors when you are doing deals but be sure you are following the rules, i.e. if you get it in your personal name, you buy in your personal name, etc... good luck.

Christian Rasmussen · Answer

Since becoming an agent I can't even express how much money I've saved. There are so many benefits, some which you outlined - access to MLS, not having to wait on somebody to make a move, $$$... and many more - Knowledge!!! at the very least you're going to know more about the industry and how can you go wrong there?? Also, you have the upper hand when working with Realtors who have a property you might be interested in, YOU get to negotiate, this has saved me plenty of dollars. A big one that I do want to touch on as well is that Realtors don't always look for the best of the best deals! I had an unfortunate experience with my first Realtor... she would pull three or four houses that she thought were feasible and if we didn't like them she would do it again. Now I'm able to look at every single listing I want to, and I'm finding deals quicker than ever before!

Now there is always a downside, small or large that's all relative. One being TIME! It takes much more time to fulfill someone's job that you're used to 'hiring out'. For me the time is entirely worth it, but that's all in the eye of the beholder. The second issue I would have is $$$$. Becoming a realtor isn't cheap, but if you do a deal a year you're paying for your fees. One last thing is that Realtors have different range of experiences (usually...) and this can sometime prove invaluable.

Anyways hope this post helps!

Best of luck to you from St. Paul!

-C

Eric Schmid · Answer

Hi everybody!

We are looking for an individual that is a licensed real estate broker in the state of Minnesota, living near the Minneapolis area. Our company is a start-up that is looking to change the way real estate is traditionally done.

We are extremely passionate about real estate and providing as much value as possible to consumers. If you are someone who has their broker license and wants to be a part of an industry-changing business, we’d love to chat. Thanks!

-Eric

Rosemary L Watschke · Answer

Josh,

Did you ever get your LBL and if so, did you setup a trust account? I'm looking at getting my license and need to know how to setup the account.

Thanks,

Rose

Account Closed · Answer

it wouldn't hurt, I recently got my realtors license for similar reasons. I was able to be my own agent when I bought my primary home. I was able to see the house the same day it came on the market and also had the offer submitted the same day. It paid for itself that day, not to mention Its been a good learning experience.

Miller Josh · Answer

Thanks again for all the advice! I decide to go with the Limited Broker for now. One question is do you know if I have to have a trust account? I contracted the state as it looks like there is a waiver but all they said is to read the law. I did that and it was confusing to me and not clear. Any thoughts?

Limited Broker license in Minnesota?

Most Popular Reply