All Forum Posts by: Jay Thomas

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 

In my opinion Z is not your friend. I almost never post the rental listings there, unless the owner just begs me to do it. It's just a time burner. I get much better qualified tenants in MLS in my opinion. If you're just thinking about getting licensed to do your own business, I advise against this. Get a great agent on your team. Handle the high level stuff and let us do the grunt work for you. It cost a fair amount of money to get your license and pay all the costs and as you mention follow all the laws and hoops. Not sure how many doors you have, but if it is a handful like most investors then use your team. Real Estate is a team sport. A great realtor will save you time and money and headaches you didn't even know you had, so you can focus your activities on higher dollar ones. A great realtor will be competent and just doing a couple of sale or a couple leases a year probably makes you your own worst enemy. I see this so often where the person knows just enough to be dangerous to themselves. If you're going to be super active and buying and sell a dozen a year or more and renting a dozen or two a year and doing leases and extensions and marketing....maybe then it might make sense to me.

@Jay Thomas If posting on the MLS, I need to run everything through the brokerage, use their pricing guidelines, and pay them out. If operating as a FRBO or FSBO, I can transact outside of the brokerage without a commission split.

I disclose to prospective tenants that I am a licensed agent, although in MA it isn't legally required for tenants. I find it lends credibility to me as a professional in the industry and it is better to be fully transparent. We do have a form in Massachusetts that is called the Rental Brokerage Fee Disclosure that we need to have signed. 

Hello everyone

I have been saving in a Capital one 360 account that yields 1.0 APY  I opened a business checking and saving account at a local bank that I would like to build a relationship with for investing. I cannot believe the different types of fees. It seems like they penalize you for everything. Should I keep the money I have saved for down payments in the Capital One account and just move it when I need it or am I focusing on the pennies instead of the dollars?