Should you get a RE license?

Question

What are the pros and cons of having your real estate license as an investor? Does the answer depend on which state you're in? (I'm in NC)I'm brand new so I don't know what I don't know yet. Thanks!

Mike Hanneman · Answer

Getting your license depends on what you want to do with it. If you are thinking to get it because of flipping and saving the commission then I could see that as a good reason. However if you are just looking at becoming an agent for work then you should research your area. Here my area is saturated with agents. At a few investor meeting ago the presenters went over the statistics and there are actually more agents then listings here!! Not a good place to become a new agent.

Ernest Grindle · Answer

I'm also considering getting my RE license, primarily so I can have more flexibility in when/where to look at a property, and to more quickly be able to engage with the seller's agent. Having access to the MLS would also be a good benefit. But since I'm doing RE investment while also working a full-time job, I need to make sure that becoming an agent isn't too expensive and won't require a lot of time commitment (other than what I'm committing for my own investments).

Rhonda Blue · Answer

I got my license and to be honest it has not helped my investing career at all! My experience with being a licensed agent is expensive and joining a big brokerage for "training" turned more into a full time job and has not fulfilled my plan of investing, deals, and improving passive cash flow! I network locally with flippers and hard money lenders already plus knew how to fill out purchase contracts! The expense with licensing, insurance, advertising, time and commitment for door knocking and turning leads into sales is a full time job! Currently my focus for our family is investing in OOS rentals to reach a goal passive income to allow for a freedom number for my husband and myself! The one advantage to being an agent was referral fees when purchasing but only has applied when purchasing off MLS! You definitely should know your goals and if getting your license aligns then it could be worth it for you!

Huiping S. · Answer

For real estate, you need to have a 'team', such as lender, insurance, title company, contract, etc, and knowledge. Just go to get your license and join a big brokerage who can provide you good training, such as how to write contract, how to work with client, how to analyze a property, market, what type of insurance and more valuable is to connected with those people and some realtors. Now the inventory is so low so have the capability to identify deal and act quick are vital. Just go to get your license and always good to have knowledge and skills for what you will do.

Christopher Giannino · Answer

As @Jonna Weber said, I think it all depends on the type of investing you plan on doing and what your ultimate goal is. I recently got licensed because I felt like it would be a great next step for me. Although I see advantages to holding a license such as access to MLS, networking opportunities, receiving a commission when you buy/sell (just to name a few), I also see that there are a few drawbacks. Some of the drawbacks I see is that a lot of education needed after the initial RE licensing class, a nice chunk of change is needed to start (here in NJ I spent probably about $2,000-3,000 within my first few months in order to get licensed) and if you plan on doing this full time you'll need a drive to succeed.Overall, I feel like getting my license was a great thing for me but just know upfront it isn't "easy money." The hard part starts after you pass your State exam.If you do go this route, I would strongly suggest signing on with a brokerage that offers a lot of training and/or a coaching program. I could see it being really easy becoming "lost" if you don't have training as a new agent.

Jonna Weber · Answer

@Wendy Wood - Good question! So much of it has to do with what type of investing you are planning to get into, and the frequency in which you buy and sell. When we were first actively buying buy and holds, we relied heavily on a great Realtor to help us negotiate deals. I didn't get my license until a couple of years later, when I decided to make a career out of it to serve others. Here in Idaho, our licensing requirements are less demanding than in many states. If you are planning on actively flipping, then I would say a license would be very advantageous. You will find many articles on the pros and cons of licensing throughout the BP site. My friend and fellow Realtor @Dawn Brenengen is in North Carolina and would be more familiar with your state requirements.