All Forum Posts by: Chris Farrugia

Awesome, glad to hear you're inspired.  When I said you won't save money on the buying of the property, it really is just because you're not likely going to be buying properties under a listing agreement that has commission.  So what you'll be doing is finding some property you think you can rehab, talking directly to the owner and offering some price well below what you think you can get out of it.  Since it isn't listed, no commission there.

So, you or your crew go into the home and do whatever you need to do to get it back on market. Well, now you're not going to list by owner. You have a real estate license and you've picked a broker that lets you keep 100% (or damn close to it) of your commission because you pay a very small desk fee ($100 or so). Now you list that unit on the MLS yourself at let's pick a completely random number--6% commission split between buyer and seller's agent.  You're the selling agent so you're not paying 3% there... so really, you only need to pay 3% to whoever brings you the buyer.  Here's the great thing though.  Many times, someone is going to drive past your beautiful house and call you directly!  Now you're the selling agent and you have the buyer (called a transaction broker) so you don't pay commission to anybody!  Well, you mail me my $500 consulting fee... but yeah, no commission.  More often than not, you'll pay 3% to someone bringing you a buyer but you've factored that into your costs and you've accounted for that cost of doing business.

How to get a Colorado Real Estate License

See if Kaplan has an online school.  I've heard so many good things about them.  That being said, I took mine from a local real estate school, sitting in class 8 hours a day for however many days it was.  I do not recommend that.  It was like library story time when you're a kid, but without the magic carpet, imagination or enjoyment.

Here are the details on what's involved.  It's very simple to find that information.  How To Get a New Jersey Real Estate License

There's also an article on advantages to having a license.

Just one tip and take this advice for what it's worth but this business requires you to be a self-starter.  In other words, you are going to control your own destiny and success in this business and a lot of that is learning to do things on your own.  I bring this up because your questions here are very easy to find answers to just on Google or even searching here on Bigger Pockets.  Perhaps you have a more specific question we could help you with and we're leading up to that but the part about getting your license and pros and cons are both readily available.

Just a couple of things.  When you complete your license, you're going to be a sales agent and you'll work for a broker.  There's a big distinction there because your broker is who sets the rules for you.  That's why it is important to pick the right brokerage. Also, here's how to get an Illinois real estate license.

With that out of the way, there's absolutely no reason why you can't wholesale deals with a real estate license. In fact, you're setting yourself up very nicely by getting your license. First of all, you're not going to save commission when you buy most of the time (since you'll likely not be buying listed property. However, you're going to turn it around and save yourself the commission (at least half of it) when you sell! Furthermore, you get to decide how it shows up on the MLS and you'll build a lot of valuable relationships with other agents that are going to help you immensely.

So why do people say that you don't want to have a real estate license when you wholesale?  The most common answer is that it's a conflict of interest in that you have too many disclosures.  This is simply incorrect.  All you have to do is introduce yourself as an agent and you've disclosed properly.  When you sell, you're going to disclose that you're an agent to the buyer.  That is literally as simple as, "Kahil Ortiz is a licensed real estate agent in the State of Illinois."  Now, I'm not a lawyer and I highly suggest you speak to one when you start wholesaling but that's the main idea.

Disclosure, disclosure, disclosure.  That's going to be the key.

The other reason I hear is people crying that you pay so much in fees that it cuts into your profits.  That's ridiculous!  The money you save in commissions on one deal will likely cover your license expenses for the entire year!

Now, as far as how you can use your license to help you make more money... you will be a member of your local board and take advantage of the board's classes!  Every board I've ever seen offers a wide range of classes.  In fact, I'm going to one next Friday called, "How to jumpstart your real estate career."  Why would I go?  Because it's a short investment of my time and if I get one or two pieces of advice, it could means thousands and thousands of dollars in return.

Next, you will have INSTANT access to the MLS. You'll have chances to jump on deals long before a lot of your competition has woken up in the morning. That's a big deal and one you will learn to love. It's great walking into a new listing and not seeing a single card on the kitchen counter. You've beat others there!

Best of luck, Kahil.  Go get that license.  It's worth every penny!

I have a real estate license and I've yet to find a con other than the cost to maintain that license (which varies by state).  A lot of times you'll hear people list the extra disclosures that go along with it but I've never once had that become an issue.  It's simply a matter of saying, "Chris Farrugia is a licensed Realtor in the State of Florida" on any paperwork I have to do for properties I buy or list where I have a relationship with the seller.  In your situation, could you let your wife do the real estate side of things while you do the lending side?  That would save you licensing fees and it doesn't sound like you'd miss out on anything.  Then next year, you could jump in with two feet.

@Kairaba Burson You and your 14 year old should move to Naples, FL and you guys can live with us in our 1 bedroom flip on limited incomes!  Sounds like your boy has the electrical covered, you have the plumbing!

That's a damn good point. Isn't it really hard to find investors when the ROI is low? I do understand there are diamonds in the rough but let's face it--this is a risky business.

 I'm actually shocked at two things--the number of helpful responses are amazing and the fact that so many people sub out all of their work.  I'm not seeing how there is margin in it when margins are already so tight.  I can't get a plumber to even step foot in my house for less than $100, let alone rip out and install an entirely new tub and fixtures.  That's the part that confuses me the most I think is how there's money left over after doing major changes like a tub swap.  The other common thing though that makes me different is that I don't have the money to go out and buy multiple properties so a lot of the answers where people are spending their time looking for their next house won't apply to my situation *yet*.  I'm looking to flip a cheap place and roll that money into another.  So, until I flip it, I have time to do some of the work on my own.

 Thanks.  I'm looking to buy one house.  I don't have the cash for more so I do have a bit of time.

 Yeah, I'm thinking if I buy a place to rehab and live in it at the same time, I'd have to do the kitchen first and a bathroom while I then work on the rest. I grew up in a home my parents built but I was too young to learn the process well enough to do it on my own.