Originally posted by Brian P:
OK, getting a license just to get MLS access, waste of time and money. less money and the right contacts can get you that. I was an investor for 10 years before I added real estate broker to my resume.
The main reason is if your really an active investor you will come across a ton of opportunities to make extra money from a license. I was giving an agent those leads in a hand washing deal and one day at lunch two agents came in at sat at the counter with me. They talked about deals and commissions, etc. and I sort of listed the deals I had sent the agent the past deal and when I saw the amount he had made off me I said maybe I should get a license.
Well I have never regretted it, so use it to make money not just MLS access. Now your state may require disclosure but California doesn't. Many agents think it state law but it is not, it is the Realtors Code of Ethics that requires it, not the state, so check with your state. But a proper disclosure is not a big deal, many prospects like the idea your licensed because they figure you know what your doing.
As for using it to collect commission on your deals, don't do that if you don't have to. Deduct the amount from the sales price and make it capital gains instead of earned income. If I take a commission I have to pay income taxes on it, I also have to pay the self-employment tax on it. Save the money and use it. plus telling the prospect your not paying a commission has some impact.
Brian, I'm a little confused. You say the main reason you got a license is you were giving leads to agents in a hand washing deal then realized the money they were making. I am assuming you mean you passed up on commissions, ie: 2-3% of sales, vs. giving good investment opportunities away, or both? I would not understand giving good deals away as an REI, then it becomes a matter of do you want to spend your time selling property or investing in it does it not?
Also, as you said, you don't need a license to shift money as income to capital gains, nor to find info on the internet bulk of which some say is "only found in MLS" which I have no access and don't know. I did one flip property long ago, only thing the bank used that lent me 100% LTV on a projected after rehab is my personal income. He told me he has investor's that have established a positive track record with their bank and once I do that he will not need my personal income. Never cared if I had a license or not. Not that I knew what I was doing back then and I lost my job, but I remember what little experience I do have. That was 12 years ago the amount of info on the net has far since developed making me wonder if MLS and the need for agents will eventually go away.
I just sold my primary home through a $300 flat fee service I heard through a freind and will never hire an agent again to sell my home, and word is spreading in my town. I saved around $5,000 and if I ever had to buy I would not hire an agent and look @ FSBO, websites, REO's, etc…..I also negoited the buyers agents commision down $1500 from the MLS listing. Lots of sellers in my area like me can't afford agents they are taking to big a loss already in a bad market.
