Should Investors Obtain a Real Estate License?

You will find conflicting opinions as to whether a RE license is an asset or not. I, personally, do not like having a license. It inhibits some of the techniques that I can use as an investor w/o a license.

I was licensed previously in CA and gave up it up.

Karen

I agree that some techniques that are used as an investor could not be used on and real estate agent controlled property. However, there are real estate agents who are also investors. I gather the agent would have to separate the two businesses as far as the processes used to complete a transaction, but I think it would be a fine line to walk to keep from "co-mingling" the two. In order to keep from giving the appearance of any improprieties I would choose to fore go wearing both hats.

Thanks.

Hey Verna,

I met a couple at PMI in Utah, they are working together. He is an agent and she is not and they was telling us, that scenario is giving them the best of both worlds.

I saw in your profile that you're not married, but you may have a person in your life that you can partner up with.

Hopefully that is an idea you might like.

Thomas

that coupling up works best for one to have the license and one not to.

I actually do have a partner/mentor who decided to get the RE license. He is scheduled to take the PSI Exam early next month. I agree that if one partner has a license and the other doesn't it should work great. I just think the problem is if one person is trying to do both.

Thanks

Verna,

I went after my real estate license in 2012 and it was not my cup of tea. Although I learned the technical aspects of the transaction, and the role I must play .....only hindered my outlook towards real estate investing, because this type of investing we are doing are creative deals and not structured in nature.

As you stated why work so hard only to give a majority of the profit to other players?

Besides Rei clubs are great for locating these agents as is the script Matt has created....

We are leaders of our power team, how can we look forward if we are not leveraging other people's time and talents?

That's the way I felt too Joel. Being an Agent wasn't for me either, but it gave me an interest in real estate. I kept trying to figure out what else I could do in the arena of real estate; loan officer, processor, title officer, etc. None of those put any fire in me. Then I saw Dean's info commercial and my eyes and ears lit up. Being an investor really sparked an interest and so I am here!

Hey does dean have a real state license? Does Matt Larson have one? I think not, and I never heard them telling us investors to get one. Must be for a reason. I think getting a license would just waste our time when you get find an investor friendly agent to get your everything you want and then when you have built that relationship with the agent and closed on many properties with that agent you can just ask your agent for their MLS login info to the MLS. I heard of a couple investors doing this.

Ray

You are right the need for a license is not necessary, heck it can be a time / money waste.....
But the way my mind is, I like to know the structure of a business and then I like the opposite angle which is the creative side.
To understand dynamics, and positions,

for example we are not contractors, but we ask contractors question and how they go about it.
To understand the general scope of their work so when we get our evaluations we can come close to the price n labor cost

Then we find creative ways to cut cost n labor like Joe Jurek said about going To Lowe's or Home Depo or a Manards in the mid west

For example, I see in your picture you have a distinctive style of clothing, that speaks volume of how you conduct yourself and your outlook...

I for one have an eagle in flight on a sunset if I'm not mistaken.......

I trailed off, we each have our ways, we find a common ground and we continue onward.......

You can be a member with your local association of Realtors and gain access to the MLS that way. It's not necessary to be attached to a broker's office if you don't plan on being an active agent. The DRE will place your license on inactive status. The down side is that there are disclosure rules when you buy a property as an investor who also happens to hold a real estate agent's license. Whether active or inactive, you must notify the seller of your license, otherwise you may get into legal trouble if the buyer finds out later when an issue arises.

Unless you plan on being unethical with home owners, the disclosure rule shouldn't be a big deal.

Paul do you know if this applies also if your buying as an L.L.C. ?

Thanks for that information. My partner is planning to take the RE Exam in early September. I will be sure to pass this information to him. Is there some kind of official disclosure form that must be used? Do you know where I can obtain one if there is?

Thanks

The way I look at it Agents are Agents, Investors are Investors etc... its what makes the real estate world go around. Everyone has a part to play. Once those parts are mixed you become less effective at one or the other. If an Investor or wholesaler becomes an agent they lose their effectiveness as they will then have to perform by certain ethics, work at a Brokerage and disclose that they are a licensed agent at the start of every property negotiation, seller negotiation etc...

My suggestion on this is to have your spouse or older child get their Agent license so you can have MLS access while all of the Investor/ wholesaler dealings remain with you.

I agree with your opinion about becoming less effective when wearing both hats.

I am with Carol, somebody else like a family member can get the license and then work together. That is my humble opinion. Thanks.

I have found in these instances that you should look for a little mom and pop real estate company. Nothing national, nothing big. Often these companies are more than willing to "increase" their firm without added costs. Couple that with your willingness to chip in to pay for the MLS usage and you have a win/win situation.

Whether you have an LLC or not does not matter. As long as you are a party to the sale then you must disclose. The purpose of disclosure is to make certain all parties are aware of who is who and what is what.

After learning the buyer is a licensed agent, the seller might also want to seek professional representation in the sale. With prior notice, they'll be assured to exercise all their options. Basically, think of disclosure similar to the discovery phase in court proceedings. Everyone is aware of everything and can clearly decide on their best course of action.

I am now changing my mind as to maybe becoming an agent, especially since I started taking Matt's class. I don't want to be less effective as an investor, you can make sooo much more $ as an investor anyway-mastering it-than you can as an agent.

There are also agents or co's who will give you MLS access for a fee every month, but I will just have agents who can do that for me.

This is a perfect way to say it!

Karen

I've yet to complete a deal so my comments certainly don't carry much weight at the moment. I was an agent in Minneapolis when I first tried to invest. I found that I was spending a lot of time on the MLS, on top of making offers. On the other hand I didn't want to give up control of this process. My thought is to let a realtor pour over the data and the offers. I just moved and haven't started in my new city (Miami), but I'm going to go against my tendencies and try this without becoming a realtor. And finding a realtor will help my team building skills!

Frustration is the real reason behind most investors seeking to get licensed. The investor's mindset is such that they have bigger goals than merely representing others for a commission.

However, the constant struggle to get agents to research and send leads is no walk in the park. As with anyone or anything, without much incentive people generally don't like to fully apply themselves to a task. Heck, even Shamu must be constantly fed fish to do her act!

Investors need a constant flow of new leads to survive, otherwise things dry up pretty fast. Therein lies the problem, out of sheer frustration investors think if they get a license they can then take the bull by the horn, but in reality, it just makes the task even more complicated and time consuming. Being an investor is all about delegating and having others do the leg work while you analyze and finance the deals. Doing both at the same time is a surefire way to torpedo your investing career.

Paul I like your take and that of Carols

Simon

I like your take on this, and how you approached it

There are some good points. When it comes to wholesaling, the MLS is often not a good consistent source of leads. These properties are going to be very close to market. Think, the seller wants the most out of it. The agent wants the highest price in order to get more commission. Yes, there are deals in there, but the margin is going to be much smaller.

Perhaps more time and resources could be spent in locating off-market properties that have a greater wholesale potential.