Should I get my real estate license?

Question

Hey guys,

I am 21 years old and I currently work 2 jobs, 13 hours a day to be able to save money to invest in real estate. My brother and I just started up our own LLC and we want to start it out by flipping houses to get some money coming in and hopefully expand to rentals and hit commercial later on. My mind has come across getting my real estate license and possibly becoming a real estate agent, not only for the income but also the education, networking, and access to MLS.  I just want to know would this be worth it? Thank you for your time!

Marcus

Andrea Weule · Answer

Hello Marcus,

Welcome to BP!  It's really up to you.  I love that you're busting your butt to make some money to invest with.  That's dedication.

A License can be an asset and a detriment.  A license can allow you do get commissions and access the mls.  It give you opportunities for additional training and a team to work with as well.  On the negative, it can be restrictive...you have less flexibility with marketing, you will also have to commit a fair amount of time to getting the license (it doesn't sound like you have tons of free time as it is), and you often have to work under another broker for a year or two before you can go out on your own (that broker may not be okay with you only focusing on your own deals and the broker will expect a cut of your commission as well).

For me a license never made sense as I can have agents working for me.  Leveraging someone else's time has been key to my success and doing more.  It's really a personal decision.

Best of Success!

Ruth Lyons · Answer

I actually started as an investor (buy & holds and flips) in 2015 and decided to get my license in 2018. Pros and cons by others above are accurate. One thing you should know is that there are a lot of fees and expenses to be a successful agent and, according to NAR, the median annual salary of full-time agents is only around $48,600 before fees, marketing expenses, etc. There's no health insurance or other corporate benefits either. Fortunately, I'm doing better than average working with retail clients and having my license has helped me with my deals, both experience-wise and MLS access. While I still buy from wholesalers from time to time, my last two deals were MLS listings and I got to them first because as an agent, I have access to listings in "coming soon" status whereas the public sites like Zillow cannot post them until they are in "active" status.

Paul Shannon · Answer

I actually started out in investing by getting my RE License.  I never intended to represent buyers or sellers, but thought it would be a benefit to me personally and maybe I would save on commissions if I sold any properties down the line.  After a year, I put my license in referral status as it wasn't worth the time and cost to keep it active.  It did have some benefits though:

*Pros - Access to MLS and ability to run accurate comps, seeing deals before others had access, building learning curve and confidence, understand real estate transactions and contracts

*Cons - Cost (RE License fees, broker fees), held to a higher standard and have to disclose you are a realtor to buyers/sellers, not many deals that are investment worthy are listed on MLS

I think if you are flipping, it could make sense if you are going to sell 5+ properties a year.  There is a benefit to getting your learning curve up, but ultimately I would skip it otherwise.  I'm more a buy/hold investor.  Flip or buy/hold, you're going to find more deals that pencil out for an investment off-market.  I'd focus your time on networking with wholesalers, realtors, other investors rather than getting your license yourself.

Bethany Kerr · Answer

I agree with the above statements.  I am a licensed agent and just started flipping houses, but real estate sales is my first line of business.  As a rehabber, my license does prevent me from marketing my flips before they are complete, which is a bummer.  Coming from your point of view, it might benefit you more to choose an agent you'd like to work with that will share market information on an ongoing basis and list your flips.  There's a lot of time and expense to maintaining a license as well as experience you need to gain through selling to actually have a good handle on the process.  If you plan on making sales part of your income stream, I'd consider getting your license.

Anthony Simboli · Answer

Just my input, but also interested to see what others say, I've taken the classes for MA but have not taken the exam yet. My understanding is even if I get the license I'll still need to work for a company in order to get access to everything and it would take many years/hours to get to a point of being a broker to do it all on my own. I would say that there is always benefit in networking and educating yourself around people who are in the field

Should I get my real estate license?

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