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Updated almost 7 years ago, 01/18/2018
Do I need a Real Estate license.
I know this question has been asked many many times, but this pertains to me personally. My father who has been a Realtor as long as I can remember says go for it. My uncle who is also a realtor says no it will create too much liability. I’m not looking to become an agent who works with clients, I want a license specifically to aid my investing career/business, and to possibly work with other investors. May possibly get into a wholesaling as well and I feel a license in that aspect can’t hurt! Your thought are much appreciated...
#5 Wholesaling Contributor
- Real Estate Broker
- Naples, FL
The education is a bonus and more doors will be open for you if you become a licensee.
Originally posted by @John Thedford:
The education is a bonus and more doors will be open for you if you become a licensee.
My thoughts exactly, thank you for the input...
I'm currently in class for my license. I feel great about it for a couple of reasons. I tried to wholesale and it just didn't feel legit. There's nothing wrong with it so I'm not knocking it but... It very well could have been that I just wasn't good as I was trying to learn the business from a friend that I paid to help me. Felt a little sleezy honestly. I did the mailers, I got some responses and talked to a handful of people. I ended up giving a deal away to a friend b/c I couldn't find a buyer just so that I could help the seller that I "promised" I'd buy his house. My thing is, I will do a flip and I may even wholesale down the road. I just want to legitimize my business with more professionalism and be able to help a wider range of people in my business. I was back and forth about it in the beginning, but now I'm ALL IN on getting my license. I realize it won't teach you how to sale real estate but I'm already learning the networking aspects of it is invaluable. Sure and I have heard the story, real estate agents typically don't invest. Well, that won't be my story, I fully plan to invest (buy & hold), buy & sell for clients along with flipping. So if you are in Indianapolis in March and need an agent to work with or a potential investor partner, I'll be here with a license ready to help where I can!
#5 Wholesaling Contributor
- Real Estate Broker
- Naples, FL
Originally posted by @Travis Darden:
I'm currently in class for my license. I feel great about it for a couple of reasons. I tried to wholesale and it just didn't feel legit. There's nothing wrong with it so I'm not knocking it but... It very well could have been that I just wasn't good as I was trying to learn the business from a friend that I paid to help me. Felt a little sleezy honestly. I did the mailers, I got some responses and talked to a handful of people. I ended up giving a deal away to a friend b/c I couldn't find a buyer just so that I could help the seller that I "promised" I'd buy his house. My thing is, I will do a flip and I may even wholesale down the road. I just want to legitimize my business with more professionalism and be able to help a wider range of people in my business. I was back and forth about it in the beginning, but now I'm ALL IN on getting my license. I realize it won't teach you how to sale real estate but I'm already learning the networking aspects of it is invaluable. Sure and I have heard the story, real estate agents typically don't invest. Well, that won't be my story, I fully plan to invest (buy & hold), buy & sell for clients along with flipping. So if you are in Indianapolis in March and need an agent to work with or a potential investor partner, I'll be here with a license ready to help where I can!
Good post..honest and factual. Supposedly about 33% of agents are investors. The other 67% have a job:)
Getting a Real Estate license will teach you very little, if anything, about how to make money in this business. Licensing is about knowing laws and rules - not about making money in Real Estate.
True, a license can open some doors and may allow some opportunities to be presented, but having a license also assumes you know all the laws and rules, which creates a substantial liability issue for the licensee who is also an investor... i.e. if you're going to get "creative" on a deal, that creativity better be 100% by the book. Licensees are held to a higher standard (not that a having a license makes you any better or smarter than anybody else).
Originally posted by @Blair Poelman:
i.e. if you're going to get "creative" on a deal, that creativity better be 100% by the book.
Our industry would be much better off if everyone, licensed or not, lived by this standard. If you promise someone you'll buy their house, then buy it. If you're planning to wholesale a house, then disclose that in your contract. If you tell a seller you are a cash buyer, then show legit Proof of Funds. If you care about the apperance of you community, then don't put up (or at least collect) your bandit signs.
Yes, there is a higher standard for licensees. I don't think thats a bad thing.
(P.S. not trying to knock you Blair, I know you weren't insinuating that non-licensees should be able to get away with sub standard behavior)
- Real Estate Broker
- 1658 N. Milwaukee Ave Ste B PMP 18969 Chicago, IL 60647
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@Todd Romero I would say get your license. I started out where you are now. I got my license to help me as I invested in buy and holds in the Chicago near southwest suburbs near Oak Park. I ended up working with some amazing investors in the area, many whom I met here on Bigger Pockets. I never would have been able to project the kind of business success I would have. I am sure the same will happen for you.
As for liability, I can't think of how a real estate license would really create any liability issues as long as one deals honestly and ethically with everyone. If you are wholesaling, explain it to the seller. If you are buying under market, say so! You should be fine on that end.
Thank you to everyone who has taken the time to reply to this thread it is much appreciated and all advice will be taken into account. I lean towards getting licensed just because I feel it can only add credibility and and open up opportunity. As far as liability goes, IMO if you conduct business as business should be conducted then you should be golden! Again thank you for all the input, I'm a little overwhelmed with all of the responses.
Hi Todd,
You asked a great question and one I was pondering myself. To give some transparency, I'm going full-time into being a real estate agent in February. My decision came about because I too was interested in the investment aspect first, then got the idea that the agent license could only benefit me.
However, I've spoken with a lot of investors over the past two years and many of them have licenses. They've told me that, to them, their license wasn't that big a factor in their personal investment ventures. They tend to keep the same networks as most unlicensed investors and I've learned the investor/agent community is very close. There won't be much more that they know that a serious investor wouldn't.
So I suggest if you get your license, do so as a way to get yourself into a business operation that you run and control. Use it to create your income to invest on your own. The upside is unlimited and if you have the right attitude it can be the most rewarding career you've ever had.
That's why I got my license, because I wanted to be my own boss and I had a keen interest in real estate. Otherwise, the expenses and liability (as your uncle mentioned) can make the whole thing very unrewarding.
I hoped that helped!!
Duane
Originally posted by @Duane Smith:
Hi Todd,
You asked a great question and one I was pondering myself. To give some transparency, I'm going full-time into being a real estate agent in February. My decision came about because I too was interested in the investment aspect first, then got the idea that the agent license could only benefit me.
However, I've spoken with a lot of investors over the past two years and many of them have licenses. They've told me that, to them, their license wasn't that big a factor in their personal investment ventures. They tend to keep the same networks as most unlicensed investors and I've learned the investor/agent community is very close. There won't be much more that they know that a serious investor wouldn't.
So I suggest if you get your license, do so as a way to get yourself into a business operation that you run and control. Use it to create your income to invest on your own. The upside is unlimited and if you have the right attitude it can be the most rewarding career you've ever had.
That's why I got my license, because I wanted to be my own boss and I had a keen interest in real estate. Otherwise, the expenses and liability (as your uncle mentioned) can make the whole thing very unrewarding.
I hoped that helped!!
Duane
Thank you for the input Duane, I will take it into consideration for sure.
@Todd Romero This is a semi-standard response but in my opinion, it really depends on where you are at in your investing career. I do think it is a good idea to get your license as it will surely open more doors but it is not a show stopper if you do not have time now. It doesn't hurt to find a motivated RE Agent to help get the investment ball rolling. I recommend finding a young up and coming agent willing to hustle and put the time in. Something we looked for was who would to take the late night and weekend phone calls to help us close on a deal faster. After a few conversations with various agents, it was clear who was willing to hustle. Lots of options out there. Good luck!
@Todd Romero Todd, why not give you both options a try?
What do I mean by that? I'm saying get your license, and if you think it doesn't add value to you and/or business, then when it expires don't renew it.
To conclude, whenever we learn something new, we learn more than we imagine. As an investor/agent, it is our duty to ensure that our license remains an asset and never a liability. Now, if an agent gets to that point in their journey, perhaps its time for a career change.
Hope this helps. Goodluck. Thanks! - Ola
If you do end up getting your license, our brokerage in Castleton is looking for agents. We primarily work with investors, and also have a PM company and a construction management company. It's a great place to learn the ropes of how to use your license as an investor, and also help other investors. PM me if you want more info. I've been here since mid October and have learned a TON.
@Todd Romero In our state of Oregon you need a license if you are going to wholesale legally.
#5 Wholesaling Contributor
- Real Estate Broker
- Naples, FL
Originally posted by @Todd Romero:
Thank you to everyone who has taken the time to reply to this thread it is much appreciated and all advice will be taken into account. I lean towards getting licensed just because I feel it can only add credibility and and open up opportunity. As far as liability goes, IMO if you conduct business as business should be conducted then you should be golden! Again thank you for all the input, I'm a little overwhelmed with all of the responses.
Liability can be reduced with E&O insurance. As to opportunities, if you cannot buy a property cheap enough, you still have the opportunity to list it. You can also represent sellers or transactions listed on the MLS which a licensee cannot do. Go for it.
As a licensed real estate agent, I agree with all of the comments posted above.
Hi Todd, I also was thinking the same thing almost literally. Thinking about wholesaling I thought well why not just become licensed to make the deals? Most states you need to be a realtor for at least 2 years before you can try to apply to be a broker apart from more schooling. So I also felt like hey why not get your feet wet by becoming a licensed realtor. It can open doors you will need later, and possibly do wholesaling on the side as-well. Those were my thoughts on it, hope it helps.
My personal experience is that having a license is very helpful.
Access to mailing lists and MLS data will buy you speed and accuracy.
There are many activities that you need a license to perform so if you
do decide to get one it allows you to legally perform more real estate
related actions.
Todd, thanks for asking the question and seeking feedback. I am in your shoes very similar in my investing career. You have some great feedback here which I will piggy back on and join you in getting a real estate license. Good luck and all the best!
Just want to throw out a thank you to all of you that have taken the time to reply to my thread, all great information. I’ll let you all know what I decide to do. Thank you, I can tell I’m going to love this site as my career develops...