All Forum Posts by: Ed Lee

Hi @Camron Cottam I have been a licensed realtor in PA for about 15 years and for the same amount of time, an investor. When I first began investing, I figured having a license could only help: It doesn't take much work obtain, doesn't cost much and much like a driver's license, assuming you don't royally screw up, you never have to go through the process again (only continuing ed.)

There are advantages: access to MLS, access to Title companies and all the benefits they bring, some advantage of potentially grabbing properties first, and also working as an agent to help other buyer/investors to find properties as well. I purchase nearly all of my houses via Sheriff Sales (foreclosures) or via Wholesalers and while anyone can go that route, I can quickly and easily pull M&J reports (Mortgage and Judgement) to dig into the financial history of the property much more quickly or easily than a non-licensed person. Often times, it's the speed at which you move that makes the difference between getting the property and buying it right. Knowledge is always king.

There are also some things to note (I wouldn't call them disadvantages): the NAR (National Assoc. of Realtors) keeps a very watchful eye on what licensed people do and if you step out of line or do anything questionable they will not be slack on doling out the proper punishment. They have high expectations of licensed people (as they should; you are dealing with most people's largest ever investment). Coincidently, you cannot plead ignorance to anything in the case that you do screw up whereas a non-licensed person can get away with mistakes. Yes, I have E&O insurance but that only goes so far. There are also a number of inherent costs associated with keeping your license, having access to the MLS and every other service so it's not free to keep your license but for me, it's more than worth the yearly fees I am required to pay. You have to split your commissions with your broker but for me, when I buy a property to flip, I'm making my money on the rehab and I'm little concerned with the commission at the close of the property. I have an agreement with another agent that if he finds the property and I purchase it, he gets the exclusive right to list it when it's ready to go back on the market after the rehab. Why do I do this? Because he has 30+ years experience as a realtor, has decades of repeat business and can often find (or already has) buyers. I don't always have time to do the "normal" realtor tasks because I'm trying to find and purchase the next property so it's well worth my time to have him handle the more traditional aspect of working with clients and selling my properties. Because of the quality of work we do, because of the location of the flips and because of the establishment of the agent, we do well.

I hope this has been helpful. There are a zillion posts about whether or not to get your license; advantages and disadvantages, etc. Poke around on BP and fill your brain!

-Dave

Hi @Dave,

This was a very insightful post - thanks for sharing!

The additional access you were given with the license, what's it like for investing in foreclosed homes? Were you able to access more inventory for foreclosed homes or just general property?

Did you find any difficulty in your investing/deal making when you had to disclose your license status? Some folks here have been on both sides of the camp for this matter. Would love to hear your opinion on it.

Thanks!

0 Votes

Originally posted by @Grant Rothenburger:

@Ed Lee Welcome!

RE: FHA: People don't talk about it too much on here because it is an owner occupied loan and most people on here are not owner occupants. Great option if you plan to live in the investment property.

RE: Wholesaling: A lot of people will give you negativity about wholesaling on here because a lot of people have had bad experiences with wholesalers. My input here is that anyone can be a "wholesaler" - not many people can be a good wholesaler. Wholesaling and doing it right, is a lot more work and requires a greater understanding of construction costs, real estate markets, holding costs, closing costs, etc.. than most people ever realize.

Hey @Grant,

I noticed that slight disconnect. A lot of great educational materials always mention FHA as a strategy but I don't see it being talked about as often as I expected. I would've expected it to be flooded with various creative strategies but that isn't the case. Maybe I'm not looking in the right places but will look into this myself a bit more.

Wholesaling does seem very tricky and though it is a great low/no capital strategy, it seems very difficult for beginners. I'm starting to lean away from wholesaling.

0 Votes

Originally posted by @Logan Allec:

Welcome, @Ed Lee. My first deal was a 4-unit up I bought with FHA 3.5% down in the Los Angeles area. It's a great strategy, man. Good luck finding one. I hear the market's crazy up there.

Hey Logan, that's amazing to hear! Would love to connect one of these days and hear more about your experience with FHA. I've been doing a lot of research on it and seems like a great option for starters like me.

0 Votes

Hi BP,

I'm new here and looking to get my feet wet in Real Estate investing like everyone here! I've been doing a lot of lurking, reading and podcast listening the last couple weeks and am finally ready to start getting my hands dirty.

Quick Intro & Goals:

Born and raised in Los Angeles but moved up to San Francisco about 4-5 years ago for work. Like most, I'm currently working at a tech company. It's been quite a ride watching the tech industry mature and with that the Real Estate market and prices skyrocket.

I'm currently interested in investing in single or 2-3 unit multifamily homes in the LA or SF area. My ultimate goal by Q2'19 is to own a property where I can be living in or renting out with cash flows netting out in the first year and being cash flow positive by end of year 2. I'm targeting properties that are valued around $500k-$1m. I'm pretty interested in the multifamily home route as that could enable me to live for free and gain a lot of experience in investing and managing potential tenants.

Questions:

Getting a Real Estate Salesperson
- At the start of the year, I had a goal in mind to get my Real Estate salesperson license. The sole purpose of this was to take classes and get educated in this field - not become a salesperson. I figured that though I won't be a full on salesperson, it might be helpful and come in handy down the road.
- Is the time and effort put in to getting this license worth it if my current strategy is to buy and hold single/MF homes? What are the pros and cons?
Finding the right mentor
- The BP community is huge on finding mentors but how do you sift through the noise? What are qualities of good and bad mentors that I should be looking for? I'm excited to meet more individuals here and hope to find myself a good mentor but also do feel overwhelmed.
FHA 3.5% Down Payment Loans
- It doesn't seem like many people talk about this as a method of financing. Why is that? What are some pros and cons from people's experience here using this method? Are there any "gotchas" with the PMI?
- I'm particularly interested in this option because of the extremely high prices here in SF. The FHA option would allow me to put a lot less money down and still be able to explore some great options.
Wholesaling
- What are everyone's thoughts on the wholesaling investment strategy for new investors? Very curious to hear about experienced investors and their journey in wholesaling. As a new investor, this seems like a great way to get your feet wet without having to deal with all the steps and bank financing.

Really excited to be part of this community and look forward to meeting very smart and talented people!

1 Vote

All Forum Posts by: Ed Lee

Ed Lee has started 2 posts and replied 14 times.

Post: Is a real estate license worth it?

Post: Hello from SF/LA! New to investing and BP

Post: Hello from SF/LA! New to investing and BP

Post: Hello from SF/LA! New to investing and BP