All Forum Posts by: Aaron Anderson

Hey BP, I'm an agent in the Nashville, Franklin, Spring Hill, and Southern TN market.  I've had 10-15 people contact me on here asking if getting a Realtors License is worth it.  This has inspired me to write a short article about the pros and cons of getting your license.  Feel free to ask any questions in the replies if I overlook something important.

First, step back and look at your goals.  Are you planning on keeping a 9-5 job, hoping to use your license as a source of income (representing clients), or are you retired already?  I was looking to get out of my 9-5 corporate job, so getting a license has become my primary source of income, on top of rental properties I've accrued. Keep in mind, my primary goal is investing, like many of you.  So what do the costs look like?  These are unavoidable costs when getting your license (all costs are estimated based on your market): 

• Licensed class education - $500
• Realtor dues (in TN, agents must be a member of a Realtors Assoc.) - $500/yr
• MLS Dues - $480/yr
• Broker dues (these vary widely) - $800-$3,000/yr
• E&O Insurance - $120/yr
• I'm not including Marketing costs because you will have these whether you chose to be an agent or not.  Hopefully you will still write letters and buy business cards.

Added together, you can expect around $2,000 per year just to keep your license active.  This surprises people who expect real estate to be a "hobby", but one closing will generally pay those bills.  So how many deals do you expect to close in a year?  If you are planning on buying 1 or 2 deals per year, running the numbers would suggest finding a good agent.  If you plan on doing more than 5, consider getting your license to save some cash!

All brokers will have different fees and pay structures.  With most brokers, they are not interviewing you, you are interviewing them!  Keep that in mind.  Some give great training programs, others have better commission splits, some may be more investor-friendly, or you might have a good local office.  Shop around, this can make all the difference.

With a license comes extra responsibilities too.  Tennessee Assoc of Realtors have strict guidelines on Marketing materials to avoid legal dispute.  On every letter you must have name, office name, office number, License #, "independently owned and operated", and other broker-specific disclosures.  even though this does make your marketing materials more professional, it can be a turn off when writing a yellow letter.

Getting my Realtors license was good for me, but it won't be for everyone.  For example, whenever I get a response from a homeowner who is willing to hear offers, I give mine first.  If they don't like it, I can convert that into a public listing and reap a commission.  But, if you plan on keeping your day job, it is very hard to be a good Agent who is available when needed.  It takes time and flexibility which 9-5's don't normally allow for.  If you are planning on getting the license for your own personal deals, make sure you're doing enough to make the annual costs worth it.

Please comment below with any questions! Hope this has been helpful for those getting started.

Aaron Anderson

I agree with what @Devan Mcclish said. For agents, we call it a "Rollover Clause".  It says just that, "If this property sells through an Agent/Professional not listed, X amount of compensation will be paid to @Cody Holbrook."  Get it in writing!

Hey Allen! I'm a Realtor and Investor with a few properties in Spring Hill. It's been home to me and my family for a few years now. I'll send you a PM and we can meet up anytime!

Hey Drew, I'm a Realtor working in Williamson and Maury Co.  If you're looking to set up outside of the Nashville limits, I'll send you a PM and we can chat about it.  Also, I have a trustworthy group of guys down here that I feel confident working with.  I'll give you their contact info as a good starting point.

I can't speak for all of those repairs, but my painter charges $1.25/sqft almost regardless of the job.  It may change a little if you want a high quality paint or have tall ceilings, but that's a good starting point.  And I've replaced countertops several times.  One time I had Home Depot cut and install granite and it was close to $2000 for close to 12 ft.  The second time I bought Butcher Block wood countertops from Ikea and had them installed by a contractor for $800 total.

Hey BP, I'm in the fortunate situation of having multiple qualified applicants for my rental property opening up next month.  One of them asked if I would be open to a lease-to-own option.  My initial gut reaction was "No." because it was my intention to keep the units long term.  However, after I thought about it, I really don't know a lot about the lease-to-own option.  I'm familiar with land contracts and seller financing, but that is only if I own the home outright, correct?

After watching several videos and reading 10+ articles on BP, I feel like I can explain it better, but still not perfectly.  Especially from the renter/buyers perspective, what are the benefits?  It seems like a lot of risk for a minimum savings off the rent price.  Is it worth it from the owners standpoint to lock up a property under contract without knowing how the market will shift later?

Can someone explain this a little better please?

There are pros and cons with having a license.  Same can be said for not having one.  I personally got my license and it has been helpful.

Simply put,  my license costs about $1,000 per year to keep active and I easily make that back in 1 transaction (whether it's for me or someone else).  Realtor fees will typically run you 3% which can add up.  You can waive these as an agent.  Also comes the perk of being able to represent others (buyers and sellers) for additional income.  Wholesalers are the non-licensed equivalent of this and can be very successful.  Normally investors are comfortable with working with wholesalers, but the average homeowner is going to choose the guy with the license.

It all depends on what your goals are: Are you just buying for yourself? Want to facilitate other deals? Realtor have to abide by many more rules and guidelines. Just some things to think about!

Thanks @Luka Milicevic!  

Hey Leland, I'll send you a PM and we can chat a little.

I bought a home in July with the plan to BRRRR it. My wife and I are living in it until we get it rent ready and we were hoping to have it rented out within 6 months. The home was originally appraised for $175,000 and I bought it for $120,000. The way my lender is explaining it to me, his bank will only reappraise the property every 12 months. So, if I decided to get a HELOC for another down payment, the current "value" of the home is $120,000. However, once 12 months passes, they will reappraise from scratch and won't look at the past sale.

I guess my question is: Are there any banks with do 3 or 6 month reappraisals? Or are their banks that don't care at all?