Need to know if getting a realtor license would help ?

Question

My wife and I are about to dive into becoming real estate investors. We’ve been remodeling our current home in hopes to sell for a profit. With that money we want to start investing . We are new to BiggerPockets and were wondering if we should get a realtor license? Any suggestions would be a huge help. Thank you

Cameron Tope · Answer

@Jered Noland unfortunately it depends!How many properties are you looking to purchase? If you just want a couple it probably doesn't make sense to spend thousands of dollars and a few weeks of your time. However, if being an agent is what you want to do to grow your business, then definitely get it. Words of caution: sometimes investors try to look for various things to do because they're scared to pull the trigger and buy a property. Don't let getting your license (if you do decide on that route) distract you for your real estate goals. Best of luck!

Ruth Lyons · Answer

I started out as an investor and got my real estate license after I had my rental portfolio up and cash-flowing. That's because I came to love the business and wanted to help other investors do what I'd done. I wouldn't recommend it unless you want to make it a business. Being an agent isn't a full-time job, it's an "all the time" job. There are a lot of annual fees involved in maintaining your license -- it's not just the cost of the initial class and license registration. As an agent, you're an independent contractor, a business owner who has marketing, administrative, travel, insurance and all the other costs involved in managing a business. There are a lot of expenses involved in helping others buy/sell, which you only get reimbursed for if/when your client goes through settlement. I find I work for free more than I like because it's tough to really know how serious a buyer is and agents can waste a lot of time and money serving clients with no guarantee of payment. The biggest surprise for me as an agent is that only about 1/2 of the deals I work hard on make it to closing and not because of anything I have control over. Get your license if it makes sense for you personally, but educate yourself on what being an agent really entails. At the end of the day, you're a salesperson working on commission. If you don't sell, you don't eat.

Jered Noland · Answer

@Ruth Lyons thank you

Jered Noland · Answer

@Lien Vuong thank you

Jered Noland · Answer

@Paris Williford thank you for the advice, we appreciate it!

Jered Noland · Answer

@David Abbate thank you for the advice.

Lien Vuong · Answer

In most cases if you’re just beginning on your journey getting a license is not going to make sense. There’s cost of courses, education, licensing, time, and depending on your split with your brokerage and then Uncle Sam you’re not going to walk away with a lot. Not to mention you would be representing yourself which won’t do you a lot of favors here as you do not know how to exactly transact a deal yet and lack knowledge in the market place. Yes your broker will help some but any seasoned broker will know that you’re just expending their time to guide you thru it rather than to build the skills and grow your RE business. Work with an experienced agent who can provide you more value than the few thousand you would pocket and rely on them to put their professional expertise in your investment.My two cents ..

Paris Williford · Answer

@Jered NolandYes, when you first obtain your license you will be considered a “provisional broker” and must work under a Broker in Charge until you complete post-licensing.(This is the case in my state - NC, laws may vary elsewhere)

Jered Noland · Answer

would we have to work for a broker if we get a realtor license?

Nick Rutkowski · Answer

@Jered NolandIt depends on your game plan, do you plan on selling real estate or just buying, investing in residential or commercial, investing with others or by yourself? If you get licensed, it’s going into the sales business. So keep that in mind. I can’t tell you who you want to be but I can tell you from experience these are some potential pitfalls if you get a license. Conflict of interest between you and your broker - who are you looking for properties for? You or your clients?Management - some brokers won’t allow you to manage for other landlords, too much liability. Time Management - showing properties vs. fixing your own. The good news is you can become a broker and none of this matters. But you’ll have to own your own firm, insurance, office space, etc. Good luck in your decision.