Why Should/Shouldn't I Become an REA?

One of my buyers said "Become an agent. You'll do 10 times more deals."

When you call that REA you want to control the conversation. She just knocked you off from what you wanted.

I have been licensed as an agent for two years but currently am not active (meaning I am not associated with a broker). My past broker who had his own company was not very helpful and I never got started, or sold any houses. I had a conversation about REI, assigning contracts, and double closings with him about 6 months ago and he was not for it at all, I have not talked to him since. Nice guy, but he is not into breaking away from the traditional way of doing RE.

Here's my thoughts on your question:

1. If you are your own agent then it takes up more time out of your day doing things an agent can do for you, so it is not a smart way of leveraging your time. ( I have thought about maybe starting out as my own agent, then after a couple deals look for an agent to do all that for me)

2. You need to find a broker that is also an investor, it only makes sense. If the broker is a pro at assigning contracts and double closings then it looks like you found a great mentor that will make everything that much easier.

***If you are your own agent then you will double dip in profits when assigning deals and double closings, you will get your fee plus your commission on the closing of the house, sounds like a good deal, PLEASE, ANYONE ELABORATE MORE ON THIS, IT SOUNDS TO GOOD TO BE TRUE,

3. Remember you will always have to disclose that you are a REA when buying or selling, you might miss out on some deals because people will think you are the expert trying to make a profit off them.

4. The fee's, a couple thousand a year, but if your doing deals, then its no problem.

I feel like I see more pro's than con's, but I still am not sure. Once you get going at REI you can always, stop being your a own agent and start using other agents to leverage your time better. Plus, since you are in the RE business, you will always know family or friends who will be looking to buy or sell a home, so why not make some extra commission's on the side of your REI career.

I have all of the positive 1 through 4 and I am not an agent. Also, anytime I make an offer through an agent by law they must provide a board of realtors approved contract. You forgot #5 Run accurate comps and put together CMAs. Again, I get this done for me or I know the area and don't need it done.

The negative number 4 is you must disclose you are not acting as an agent on this deal. You have a license but are acting as a private individual. Kind of does away with being an agent in this case.(working a deal as an investment)

I would say no to being an agent. I have several, I don't need to be one! This of course is just my opinion. I am free to do so much more than an agent other than represent a buyer or a seller. Then I am an agent making a commission. I am sure I would do more "deals" just not investor deals. I usually make more than 3%!

Good Luck and good questions!

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

I don't think you need to be an agent to have access. As a newer investor I have access to comps and the MLS as well.

How do you get access to the MLS if you aren't a agent? Do you have a Agent that you know that gives you access to it?

Spskcmo, you should definitely go for it! I start taking classes in July for my RE license here in NJ.

Just go to a broker who is also a investor. Remember Matt Larson said in the 30 days to RE Cash that REMAX and Keller Williams is investor friendly.

It seems like there are a number of folks, both pro and con, that have very strong opinions on the subject.

Nygnyk30 -- your points are well made, but I think femailceo is referring to the ability to gather MLS information from her REA connections. Granted, it will not be real time but accurate none the less.

So here is another follow up question:

If I am unable to find an REA to work with me -- and thus far that has proven to be a challenge -- how do I get showings of the properties that interest me? Is it as simple as calling the listing agent and using him/her to structure the contract for me? And what if they refuse to structure the contract as I ask, or worse, refuse to take my offer at all?

Thanks!

Call the agent that is the listed agent on the property you are looking at. Set the appointment with that agent. DO NOT tell them you will be assigning the contract or doing double closings. DO tell them you do not want to look at move in ready properties. You fix/flip or buy and hold. You do not want to look at properties that will go as/is to owner/occupants. You buy with cash or financing from a third party non institutional lender. Depends on the deal. Save the conversation for when you meet the agent at the property and get to know them face to face. DO NOT whip out your agent interview script!!! Make an offer on the property through this agent after you determine ARV and rehab/remodel costs. You won't have a perfect presentation the first time, you may have to do this several times to find an agent that likes you and will help you.

Also, go to every REI club meeting you can find and look for agents there.

Finally, worry about the "what ifs" when they happen. What if the contract is not accepted or the agent won't submit it? SO WHAT., on to the next. Don't let this stop you from making offers or worry you. All you need is an inspection period, no other weasel contingencies, the agent will supply the contract. What you need to worry about is getting a property that is a real deal under contract and then having a real buyer to flip it to! Worry about being able to produce when you do get an accepted offer.

Good luck,
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

i was an REA in IN and i was not thrilled with it. here in OK i have chosen not to pursue a license. i am fortunate that i have MLS access through a broker who is a member of my REIC and is also a DGer. i am his assistant and therefore i can get access to the MLS. other brokers can do this also and the MLS fees are so much less than being an agent. as an REA i felt it got in my way as an investor and was a pain to deal with. there are brokers/agents out there who work with investors and you can find them, but it might take some time. trust Michael's advice to call the listing agent. you can do alot of research for deals on www.realtor.com. some investors love being an agent as well as an investor. it's all a personal decision, but the cost and the rules can be very prohibitive as well.

Having been a licensed agent for 20 yrs, I think it could get in the way of being an investor in these types of deals in some respects; i.e., there are some Realtor ethical standards that someone could throw in one's face later. If a deal ever turned bad and they were "sue happy", the other party would use the old "he is a licensed agent so he took advantage of innocent me...". I have heard and seen it happen. You would have to disclose your agent status at every turn; which, I think, could hurt in negotiations if the seller/buyer thought, right or wrong, you were taking advantage of them based upon your "professional expertise." Find an agent that understands what you are trying to do and work it through them. It gives you a layer of protection and allows that 3rd party/disinterested and unemotional voice you may need if things get tense.

I think a good way if not the best way to find a RE Agt to work with is to simply follow Dean's advice in his latest book, "30 Days to RE Cash" (pp 31 - 41). This isn't just theory folks; this is what and how Matt Larson (Dean's boots-on-the-ground partner) is doing it himself when he first goes into a new area.

Why try to re-invent the wheel? Dean and Matt have provided a step-by-step blueprint that is very very easy for everyone to follow. Download the book here from DG's website or order the hard copy.

Ken, very excellent point. You must fully disclose if you are licensed and the perception may be that you have 'expertise knowledge' not available to the general public. Leverage your RE Agt's time (OPM and OPT) and let them earn their 3% commission while you focus on what we do best.....finding deals and locking them up!!

RE Investing -- Just Do It!

--Walter

It does NOT hinder you wanting to buy whether you have a license or not.

Having a license will give you credibility among investors if you happen to need their POF

Investors will be more willing to give you their properties to sell. What would they need you for if they can sell it themselves???

You have the option of doing rentals when sales are slow. Can't do that without a license

You can speak with other agents and not worry about being turned away for off-market properties

Fees come with the territory; youll make money to pay them no problem

Get the license, you'll be fine and wont regret it

for Godsakes, NO!

This is not the environment for that concept. Plenty of money can be made in this market if you know what you are doing. When it becomes a seller' market again (probably never again this decade), it can be good to be an agent.