Do you need a license?

What state are you in? I can't speak for everyone, but I know that here in Texas, you do not. However, there may be some other considerations that you may need to be aware of, particularly if your desire is to buy, rehab, and then sell - i.e., Texas has a relatively new law that comes close to licensing contractors (aside from the electrical, plumbing, and HVAC) - but it was only applicable if the amount of the contract was in excess of $20k, and then supposedly you would need to register and pay a small fee. That was a couple of yrs ago, and it seems to me that I heard a rumor that the $20k amount was going to be reduced. I don't know the status of that law, or even what it's called (I'm sure I can find it with some digging) - so if anyone else has any knowledge of it, I for one would sure appreciate a heads up on it.

KandK, this is off topic of the orignal poster, I am moving it to the financing section.

In VA you do not need a license to buy and invest in real estate. The number of properies you own is unlimited. When you buy a property to fix you can do some of the work yourself if its small work. when you have additions and things that will effect your land use you have to get a permit from the county which have to be pulled by a licensed contractor. When you only remodel inside the house like carpeting, paint , electrical, you do not need a license. If you hire a contractor to do work for you, its for your protection that the contractor is licensed and insured, If you want to buy houses and you want to act as a general contractor, then you have to have a contractors license from the state.

I'm in OH where a license is definitely not a requirement, and as a licensed agent, its difficult to imagine a real estate license being madatory in any state (but of course there may be exceptions). One quick check would be to check your local newspaper for FSBO listings. If a licnese is required chances are they would be non-existent but call your state's Board to be 100% sure.

Basically RE agents represent a party in a real estate transaction--that's the watered down version--and something a well informed investor can do themselves. The only exception being access to the MLS (Multiple Listing Service). This is a centralized database of all homes for sell for which the services of a licensed agent working under a broker are listed.

Hope this helps.

I know that there are advantages to being a RE agent as an RE investor, but are there any disadvantages to getting your license?

Disclosure is the main disadvantage.

...meaning that you have to disclose that you're an agent?

I have looked into this and the only advantage that I can see is you can make a little extra money when you buy or sell a property. The big disadvantage though is your are held to a different standard if you are an agent. I would prefer to become friends or "partners" with a Realtor that I can trust who would be willing to work hard and take a smaller percentage because of the recurring business. That way you can just be an investor and stay away from being a Realtor.

A lot of the investors that I know follow this same rule. It really depends on how you are looking at approaching your investing. Some investors I know want to be agents so they have access to houses at their convenience and then get the commission when they buy or sell properties.

It is really a personal thing but I prefer to just be an investor.

can anyone please tell me,if i can get a loan from the bank,i've just bought my first reo and didnt even read deans book yet ! i got it for 25k cash but just needs a little fixen! will the bank lend me money ! im a little low on funds thanks harold.

Harold:
There are a bunch of options for finding financing: banks, hard money lenders, etc. Banks usually, as you probably know, look at ones credit rating as well as if they have a flow income streaming in with which to make payments-

Hard money lenders are just one of many other options.

Also, if you have a house, one could borrow any existing equity. Many more options-

Rpatten:
You're right, one would be held to a higher standard and probably of more be expected. I need to sit down and weigh the options: the commissions will add up over time, but it may be worth it for not having to do ALL of the homework by myself. Good insight, Rpatten.

Rodske88~

I think someone said it best: There is much higher expectation for a Realtor and set ethical standards that we agree to abide by which is why I'm thinking about foregoing my license. Not because of the ethics but I fear crossing that invisible line between representing my client to the best of my ability while simultaneously looking for good deals for myself. I have the advantage that my sister-in-law is also an agent which would still give me access to someone on the front line.

The further I get into the investment side, I'd have to say I wouldn't get my license again. You simply have more freedom/options as a non-licensed investor.

Hope this helps~

Really good info, Kathy. You have basically let people know upfront that you know more than the average person knows about real estate, which I bet could tend to scare people off, sometimes. A friend of mine put it this way, too. With a license, one has to go and show the houses a bunch of times, but without one, it's nicer, because the commissions just add into the cost of running the business. That makes a lot of sense, because if you turn a bunch of properties, you'll be running all over the place and it will take time from other aspects of the business, however if you setup a brokerage/get a broker's license you could hire the work done. Thanks, Kathy, for your input.

Any info for NJ? I was just thinking xyz investments, LLC. Is it something you just pay for? or are there qualifications... I'll talk to my NJ lawer if I pursue.Just asking general imput.

Go to NJ's real estate commissioner's website, and it should tell you the stipulations, and if not it should have a phone number. In my state, you have to have your real estate license for 2 years (or equivalent experience) and a certain number of continuing education is required before you can apply for a broker license.

I had a thought on this subject. I have seen this question a lot and I have heard this question a lot and I have my own opinion but my opinion may have changed. Not a lot but I was 100% against it. Now however i am thinking that you CAN have a license.

There are a lot of reasons not to get one but the biggest is money. However as a coach I had the opportunity to teach with a guy that has his license and loves it. Now the reason he loves it is now that he has EXPERIENCE and a few deals under his belt.

So the money thing that I mentioned a second a go; There can be a lot of fees and expenses associated with it. However with a few deals under your belt you might be able to afford it and you it is great for just grabbing comps.

I have this question asked of me several time a year as I coach real estate. Usually the best way for me to explain this is to say……..If you are getting your license to expand your knowledge of real estate and you have the money, then I say go for it. Do I need to have a license to do real estate investing? The answer in most cases is NO. Most people that tell you or say you need a license to do real estate investing, just don’t understand what an investor does vs. a realtor. This is also another reason why I have a realtor help me find and make offers on properties. I don’t want to take their place, I just want to add a good realtor to my team and let them do what they do best and I will do what I do best…….INVEST.
Happy Investing!!!!

What one needs a license to do is to represent other buyers and sellers. If your purchasing the property yourself and reselling it yourself, then no license is necessary. But, if you were going to enter into an agreement (including an offer) to help someone else sell their property, you would need to be licensed. It's the basic difference between wholesaling and retailing real estate.

Wholesaling = representing yourself during the buying and reselling process

Retailing (brokering) = representing either the seller or the buyer when buying or reselling

To be on the safe side, everyone should clearly disclose who they are representing at every opportunity, especially on first face to face contact, preferably in writing, and have the other person to whom you are talking initial the disclosure.

In Texas (and I'm sure most other states have something similar), we have an Information About Brokerage Services statement that we give everyone, and we explain who we are or will be representing even before we do so, if we ever do.