As a REI, would it be beneficial to acquire a RE license?

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As a REI, would it be beneficial to acquire a RE license?

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Investor · Austin, TX · Member since 2020 · 42 posts · 7 votes

I'm looking to invest in rentals. What would be some pros and cons to getting a real estate license?

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Joel Calkins
Real Estate Agent · Member since 2020 · 139 posts · 103 votes
5y

There are many schools of thought on this subject but here's mine.

This really depends on your goal as an investor and how you are going to reach those goals. Most people say becoming a real estate agent isn't necessary because there are plenty of agents who are amazing at their job. Essentially this will allow you to focus on your end of the deal, whether that's rehab, management, or anything you can bring to the table.

Personally, I have decided to pursue my license to gain more insight into the real estate world because what's wrong with having more knowledge? 

Feel free to contact me with any of your REI questions. Good luck Matthew!

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  • Joel Calkins
    Real Estate Agent · Member since 2020 · 139 posts · 103 votes
    5y

    There are many schools of thought on this subject but here's mine.

    This really depends on your goal as an investor and how you are going to reach those goals. Most people say becoming a real estate agent isn't necessary because there are plenty of agents who are amazing at their job. Essentially this will allow you to focus on your end of the deal, whether that's rehab, management, or anything you can bring to the table.

    Personally, I have decided to pursue my license to gain more insight into the real estate world because what's wrong with having more knowledge? 

    Feel free to contact me with any of your REI questions. Good luck Matthew!

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  • Ben Zimmerman
    Rental Property Investor · Raleigh, NC · Member since 2016 · 393 posts · 995 votes
    5y

    It depends on the scale of your business.  

    If you plan on buying one property every 5-10 years like the majority of BP members, then I say it isn't worth your time.  The time it takes to take the class, as well as the yearly refresher classes that are typically required, and the fees involved in becoming licensed and staying licensed probably doesn't make it worthwhile if you only plan on sporadically purchasing a new property.  Not to mention that even though you are technically licensed, you are still very inexperienced which can make it painful to try to represent yourself if you are only doing this once every few years.

    However if you are purchasing something on a somewhat regular basis then this can be phenomenal. You don't need to wade through all of the crappy agents before you find one that fits your needs. You can do your own research, pull your own comps, have MLS access whenever you want it, and schedule viewings yourself without needing to coordinate your schedule with your agent. Obviously representing yourself also has the financial aspect of being able to save multiple thousands of dollars both when you buy, and when you sell.

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  • Terrance ClarkPro Member
    Real Estate Professional · Hickory, NC · Member since 2016 · 162 posts · 45 votes
    5y

    @Matthew H. Hey Matthew one instant pro of having your license along with rentals is being able to get the most exposure through the mls when you have a vacant unit.

    I would say more specifically only get a license if it your goal to build a business full of product and services in real estate.

    I have my license and one thing I really enjoy because of my brokerage is how my business is vertically integrated with multiple income streams!

    Check this out terranceclarkre.com/why-exp

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  • Calvin OzanickBusiness Member
    Property Manager · Janesville, WI · Member since 2017 · 707 posts · 297 votes
    5y

    The way I look at it is this. If you are strictly looking to become an agent in order to get MLS access to acquire properties, then no you should not get your license. This is because you can easily find an agent who is willing to provide you with MLS info and show you the deals you need to see. However, if you are looking to either help other investors, or selling your own properties in the future, then becoming an agent is much more worthwhile. Depending on where you are located, becoming an agent could cost upwards of 2k and then roughly 1-2k annually going forward. So you should be aware of that before getting a license to just see MLS data.

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  • Account Closed
    OP
    Investor · Austin, TX · Member since 2020 · 42 posts · 7 votes
    5y
    Originally posted by @Joel Calkins:

    There are many schools of thought on this subject but here's mine.

    This really depends on your goal as an investor and how you are going to reach those goals. Most people say becoming a real estate agent isn't necessary because there are plenty of agents who are amazing at their job. Essentially this will allow you to focus on your end of the deal, whether that's rehab, management, or anything you can bring to the table.

    Personally, I have decided to pursue my license to gain more insight into the real estate world because what's wrong with having more knowledge? 

    Feel free to contact me with any of your REI questions. Good luck Matthew!

     Thanks for the tip, Joel!

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  • Account Closed
    OP
    Investor · Austin, TX · Member since 2020 · 42 posts · 7 votes
    5y
    Originally posted by @Ben Zimmerman:

    It depends on the scale of your business.  

    If you plan on buying one property every 5-10 years like the majority of BP members, then I say it isn't worth your time.  The time it takes to take the class, as well as the yearly refresher classes that are typically required, and the fees involved in becoming licensed and staying licensed probably doesn't make it worthwhile if you only plan on sporadically purchasing a new property.  Not to mention that even though you are technically licensed, you are still very inexperienced which can make it painful to try to represent yourself if you are only doing this once every few years.

    However if you are purchasing something on a somewhat regular basis then this can be phenomenal. You don't need to wade through all of the crappy agents before you find one that fits your needs. You can do your own research, pull your own comps, have MLS access whenever you want it, and schedule viewings yourself without needing to coordinate your schedule with your agent. Obviously representing yourself also has the financial aspect of being able to save multiple thousands of dollars both when you buy, and when you sell.

    Thanks for the response, Ben! So, I'm in a position to implement the BRRRR strategy and buying multiple properties in a year could add up in agent costs. But, you are spot on about my inexperience. Hopefully I can learn the business through my Realtor; then get my license.

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  • Account Closed
    OP
    Investor · Austin, TX · Member since 2020 · 42 posts · 7 votes
    5y
    Originally posted by @Terrance Clark:

    @Matthew H. Hey Matthew one instant pro of having your license along with rentals is being able to get the most exposure through the mls when you have a vacant unit.

    I would say more specifically only get a license if it your goal to build a business full of product and services in real estate.

    I have my license and one thing I really enjoy because of my brokerage is how my business is vertically integrated with multiple income streams!

    Check this out terranceclarkre.com/why-exp

    Whoa! That looks pretty cool, Terrance. Are there live events going on in that virtual world?

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  • Account Closed
    OP
    Investor · Austin, TX · Member since 2020 · 42 posts · 7 votes
    5y
    Originally posted by @Calvin Ozanick:

    The way I look at it is this. If you are strictly looking to become an agent in order to get MLS access to acquire properties, then no you should not get your license. This is because you can easily find an agent who is willing to provide you with MLS info and show you the deals you need to see. However, if you are looking to either help other investors, or selling your own properties in the future, then becoming an agent is much more worthwhile. Depending on where you are located, becoming an agent could cost upwards of 2k and then roughly 1-2k annually going forward. So you should be aware of that before getting a license to just see MLS data.

     Thanks, Calvin! That makes a lot of sense. I'm just starting out in investing, so I'll probably stick with using an agent at first, as I gain more knowledge, then go from there. It's too soon to know how things will play out in my story until I actually start getting my feet wet. 

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  • Terrance ClarkPro Member
    Real Estate Professional · Hickory, NC · Member since 2016 · 162 posts · 45 votes
    5y

    @Matthew H. Yea Matt we just had our expcon event in it! It was amazing shoot me a message I’ll send you the recap video

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  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    5y

    @Matthew H. I think it's a good idea to work with great agents when getting started. I learned more from the agents I worked with prior to getting licensed than I did during the licensing process (not much if any of the coursework is really applicable to investing). My plan was to get licensed for the purposes of our personal investing, but I've ended up actually doing fewer personal deals as an agent, partly because I pass more deals on to clients and also because I've been enjoying working as an agent and have been dedicating more time to building that business as opposed to the investment side of things. I spent about $3k in the initial licensing process and now spend quite a bit more than that just maintaining my license (E&O insurance, Realtor dues, MLS fees, CE credits, desk fees, etc.). I track all my expenses related to maintaining my license and would be happy to share if you're curious. I think most agents would not recommend being licensed unless you want to work as an agent, as it's the kind of thing where you get out what you put in. It takes a year or two just to learn the ropes so probably not worth making that kind of monetary and time commitment if you're not really going to use your license as a career move.

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    OP
    Investor · Austin, TX · Member since 2020 · 42 posts · 7 votes
    5y

    @Steve K.

    Thanks Steve! I think you're right about gaining more knowledge by working with Agents first. I just need to find one that is willing to show me the ropes. I've already had one agent fall out because I told them I wanted to look for distressed properties and use the BRRRR strategy. It felt like I was speaking another language when talking to them about the strategy. Lots of awkward silences. Oh well, just have to keep searching.

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  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    5y

    @Matthew H. Ask around for an agent that knows the investment side of things, and when you find one, demonstrate to them that you’re serious and able to do some deals. I was fine signing exclusives as a client, a lot of people don’t like to do that but it lets an agent know you’re committed to them and not going to cut them out of a deal or anything, so they’ll be more likely to provide guidance if they have that commitment.

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    OP
    Investor · Austin, TX · Member since 2020 · 42 posts · 7 votes
    5y

    @Steve K.

    Could you give me an example of an exclusive that you signed off on? I'm totally for showing my commitment to these folks, I've thought of throwing in a bonus for the agent if they find me these deals and I close on them. Is that something you're talking about?

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  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    5y

    Colorado has a standard form we use called the Exclusive Buyers Agency Agreement. TREC probably has something similar.

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