Any value in getting a Real Estate License?

Question

I'm a buy and hold investor and was wondering if there is enough value in getting a license to offset the cost and time. I tend to lean towards, no. I have a couple of properties right now. My current goal is to acquire at least 4 additional properties before the end of 2016. I'm not counting on getting all of those properties off of the MLS. I will look to purchase directly from the seller. Is it worth it for just the connections/education/MLS access/etc? Any advice?

Thanks,

Lisa

Karl Krentzel · Answer

Speaking as an Broker/Investor... it is single handedly the GREATEST Asset you can ever have.Anyone who tells you otherwise is either clearly misinformed, or has never been an agent in my opinion.Here's just some of the reasons....MLS.Unlimited Leads. (Expired and Cancelled leads are just WAITING for you to buy them.)Unlimited Buyers. (Agents, as well as their buyers become YOUR Buyers. Easy to find on MLS)Unlimited Access to "Secret Deals". As an Agent/Investor I can personally attest to the fact that many agents swap deals back and forth.Unlimited Access to Authority. In the mind of a potential customer, especially in a competitive sales environment, having a license gives you an automatic "+1"Unlimited Affiliate Assistance. Title Companies, as well as Closing Attorneys open up their "Information Floodgates". Allowing you access to their proprietary databases for either mailing, or phone numbers.Massive Negotiation Power. As an agent, you have many more options up your sleeve when it comes to pricing. You can work miracles by eliminating your commission or other factors within the contract.Motivated Sellers love, Love, LOVE Investing Agents! The reason is simple. They know that they can get to you via your license if you are unethical. When you tell them that you aren't there for a listing.. you are there to BUY... a almost "Magical glaze" comes up! Unlimited Real Time Comparables. Stop guessing at what Zillow, The Tax assessor, and everyone else says. Look up sales that happened YESTERDAY! Get REAL TIME info! Unlimited Brokerage Assistance. Have a problem with a contract clause? Don't know how to structure something? Your Broker is MORE than happy to help if you are honest with them up front. Unlimited Referral Money. Know someone in another State that wants to list their home or buy one? Refer them to someone in that area for a 25% or more referral fee. Free NON MLS Leads. Unbelievably.. there are still people in the world who don't know an agent, and they are ALWAYS on the lookout for a Great deal. These people many times are referred by your company to someone in your office. Make a name for yourself as the "Go To Person" when it comes to Investments, and you will find your Center of Influence expand quickly.I could go on and on... but the honest truth is this... I am a Investor, who happens to have a license. God help you if you are a FSBO who thinks that you can out negotiate, out contract, or out think me.... Have a Powerful Sales Day!

Steve Trotta · Answer

Hi Lisa - A real estate license can be very valuable for two key financial reasons and one other business reason that I have leveraged it for in the past:1) Receiving a commission for buying an investment property that is marketed with a buy side commission. Although you have to be careful, as some sellers can be taken aback by an agent purchasing a property and also taking a commission, it shouldn't really matter to them as they would pay it otherwise, and this produces immediate cash for you. You have to split the commission with your broker in some capacity but I have a flexible arrangement and get to keep a majority of the commission. My broker will even submit the offers occasionally to remove the potential awkwardness of me placing the offer directly.2) Saving on the commission when selling a property. You can still offer a commission to a buyer agent and if you work out a deal with your broker, they will likely minimize the commission they will take. For example, I have my license with a friend of mine who owns a brokerage. He only takes 0.5% on investment deals on the sell side.3) You have control and you don't have to rely on others for responses on deals since you are the agent. Can be very valuable to be in control of your own destiny.I have made or saved about $50k in commissions over the past two years on five property purchases and sales. Mind you, only one was a buy and hold but it was the largest and most expensive and produced about $17k in commission.It's a small investment to get your license for the amount of potential return, not to mention you can pick up listings on the side if you so choose and produce additional cash flow. Many other reasons to do so but these are the key ones for me.Hope this helps.Steve

Brian Gibbons · Answer

Outside of buy and hold, If you are a Creative Real Estate Investor, looking at sub2, wraps, lease options, master lease options, installment sales, etc, having a license to help low equity deal sellers I think is a good idea.Also to show properties to Lease to Own Buyers being licensed is good too, staying out of hot water "acting as an agent".

Rod Desinord · Answer

I say its worth getting it. You can access the MLS and with a lot of these boards they provide free trainings that would help you tremendously especially when it comes to pulling your own comps. And you would be able to access vacant properties without always having to call a realtor to get you access. And your brokerage fees will be a whole lot less since you would be the buying or listing agent.

Lisa Henrich · Answer

@Steve Trottaand @Karl Krentzel Wow! You both make very powerful arguments for getting a license. I think I will look into it. @Rod DesinordThanks for your insight.