Real Estate Licensing Necessity?

Question

Hello Everyone. I’m A Newbie BP & I’m Looking For Some Info Outside Of Just What Im Reading On Google. My Long Term Goal Is To Residential “Buy & Hold” & “Flip” But Looking To Get Into Wholeselling As Soon As I Am Knowledgable Enough. Would You Guys Say It’s A Neccesary For Me To Get A Real Estate License? I’ve Gotten Mixed Reviews.

Marcus Auerbach · Answer

@Diamond Howard if you are considering working as an agent as a professional career, I will tell you this: it's a fantastic job, with a lot of highs and lows. You can make great money and it can be very rewarding and often times increadibly frustrating. You can see this in the drop out rate; most new licensees dont make it through year one, and from what's left most quit in year two. After 3 years you are considered seasoned and will usually have a good amount of business. In my State you have to be an agent for two years before you can take the brokers exam. You'll need a lot of training to get there, which I think is where KW really shines. You can just look up the nearest KW office and ask to speak with the team leader there.

Charlie MacPherson · Answer

@Diamond Howard There are several options.

Real estate Agent / Realtor.  Best done full time.  Lots of opportunities to help people to buy and sell properties of any description.  Probably avoid commercial unless you intend to specialize in it.

Property Management.  Look after properties. Keep tenants in line.  Resolve disputes and issues with the physical plant and grounds.  Collect rents.  Manage evictions.  Screen and place tenants.  Coordinate the turnover of units when tenants leave.

Fix & Flip.  My personal choice for investing, as MA has some really crazy landlord / tenant laws.  You'll need a team - contractors (my biggest challenge), lending (hard money, 203K / Homestyle or any normal mortgage if owner occupied).  Done right, this is relatively high amounts of short term earnings, as opposed to...

Buy & Hold.  Buy your own MFRs and be a landlord - with or without property management.  Read the forums here and you'll hear both great successes and some horror stories.

These are the top four that come to mind, but there are other avenues too - like buying non-performing notes, syndication, etc.  Those are way outside my expertise and interests, so I personally steer clear.  You can learn a lot about them here in the forums and in the podcasts.

Ehsan Rishat · Answer

@Diamond Howard It is also important to note that in many states, unlicensed wholesaling of real estate is illegal in some states. It is always best to get your license if you can afford the time and expenses.

Good Luck!

Marcus Auerbach · Answer

@Diamond Howard I have been an investor much longer than I have been an agent. Getting licensed only makes sense IMO if you are planning to work asa professional agent. Yes, there are some annual fee's and continued education. But the real issue is that if you don't work as an agent full time (>36 deals a year), you won't be skilled enough to do a god job for yourself.

I see the mistakes made by my fellow co-brokes all the time, especially in the sub 200k price range, where most of the amateur agents are able to play. Experience helps a lot when it comes to spotting issues, or playing your cards well and knowing how far you can push a deal. 5k here, 10k there, it ads up quickly.

As a real estate investor you don't need to be skilled at everything. You don't need to become a licensed plumber, you just hire a plumber, preferrably one that does his job all day every day and is really good at it.

You would not hire someone for a 3k plumbing job, who has done it a "few times before", just to find out that you did not pass city inspection and now you have to rip it all out again?

Sam Shueh · Answer

There are advantages to be wholesale. This industry is not regulated and a license can actually hurt as there are many things one can not do as a licensed realtor.

Wholesaling is also the most difficult career. Some does well most just get discouraged and disappear. Let your passion follow your career see how far you get without a license. To be self sufficient you really need a broker license and a good RE lawyer.

Charlie MacPherson · Answer

@Diamond Howard Rather than books, I'd recommend binge-listening to the BP podcasts.  There's a master's level education in there!

Diamond Howard · Answer

@Charlie MacPherson thank you so much your info has been so helpful. Are there any books you recommend for me? I’m currently finishing rich dad poor dad.

Diamond Howard · Answer

@Charlie MacPherson okay so say i realize my niche isn’t wholesaling I read deep into its and i know it’s not for me i still wanna do RE but not as a wholesaler.  What would you suggest doing next becoming a agent or just continuing building my credit until I can get a FHA or 203k to start my first income property?

Charlie MacPherson · Answer

@Diamond Howard As others have pointed out, unlicensed wholesaling is most likely illegal in your state.

I can tell you with absolute certainty that in Massachusetts and Maine, (the two states where I'm licensed), marketing a property or even selling your interest in a contract on a home that you don't own is a license-required activity.

I agree completely with @Marcus Auerbach.  There are highs and lows in this business.  But it's really rewarding too - and it's one of the few fields where someone without a college degree can make a very good living.

Good luck with your new career!

Diamond Howard · Answer

@Sam Shueh thank you so much for your input. So now in order to get a brokers license I have to become an agent first correct.

Real Estate Licensing Necessity?

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