If you are considering getting into real estate or thinking about how to get your real estate license, then this is designed to help you make this difficult decision! When considering getting your real estate license as an Investor, you are faced with quite a few considerations. Many of which, you may be unaware of.
Question to The Group
“Would it be a good idea to get my license and be a Realtor® and an Investor?”
That was the question that was posed to The TenMinuteSkill Mastermind Group on Facebook. It’s an area where our Premium Podcast Plus members get to interact on a more professional level with others who have chosen Investing as a career choice.
While it is an important question to ask, it is not an easy one to answer. While the benefits of being an agent while an investor are plentiful, there are also several challenges that you must consider.
One of The Most Popular Post Topics
One thing I have found as the voice of TheRedPillInvestor Podcast is that people (investors in particular) are in a love/hate relationship with Realtors®. Check out BiggerPockets or any other major Investor related blog and you will quickly discover how Agents, and any related thread will quickly attract attention.
The reason why is evident. With the relatively low bar of entry to “Professional” real estate, it is clear that many “bad apples” have ruined what otherwise might be a perfectly good barrel. Notwithstanding this fact, we are left as Investors with only a few choices, none of which are any good.
Our choices being involved means the following…
- Reduced access to the Multiple Listing Service and all the SOLD data it contains. (The GOLD)
- No cooperation from those who are actually involved in the business of real estate.
- Reduced sales price (reduced exposure)
- Longer wait times to sell (reduced exposure)
- More difficult closings as you must work with Title and attorneys on your own.
- Elimination of any Listed Property, REO, Short sale opportunities, estate sales that are listed and more.
Therefore, it is clear that not working with a Realtor® is simply not good business. This leaves us with the question as to “should I get my license?”
While the benefits of being an Agent/Investor are multiple; access to the multiple listing services, cooperation between other agents, off market deals that other agents do not want or cannot complete, expired listings, and much much more. This article is not intended to outline the entire “benefits package” that an agent may have, I believe that you and I could agree that there are quite a few.
However, just like there are many good points to being an agent, there are also a few negative aspects that come up with being an agent. For that, let’s take a closer examination of just a few of the items that you would need to consider as an Investing Realtor® that you would NOT have to consider as an unlicensed person.
As an Agent/Investor you must do the following….
Duties to the Public.
- Disclose the true nature of your involvement in the transaction. (Code of Ethics Article 4)
- Disclose the true current value of the home, in addition to the potential value if repaired. (Code of Ethics Article 7)
- Disclose that your intent is to sell the property for a profit (multiple State and “Commissioners Rules” in your State regarding this.)
Duties to Other Agents
- Be accountable to a Broker that you “work for”.
- Be subject to State Laws for practitioners in your area (Disclosure of your managing broker or office)
- Be subject to Federal Laws regarding advertising. (HUD Logos, etc.)
- Can face potentially higher criminal and/or civil liability if proven that you acted improperly.
- Must have Errors and Omissions Insurance
- Understand that there are ongoing costs such as MLS Fees, NAR Dues, local association fees, etc.
When you are unlicensed, many of these above stipulations will not apply to you. In consideration of the full weight of responsibility you assume as a Realtor® who invests, it is no light, nor easy decision.
However, the purpose of this article was to help guide you in the decision you are trying to make. To counterbalance the potential negatives, May I suggest an alternative thought?
Your “License to Sell”
As a licensed Realtor® who Invests, you have a tremendous advantage both in the “Realtor® World” as well as the “Investor World!” I know that by me simply saying it doesn’t make it true.
The only thing I can do is tell you a little about the hidden benefits you receive with your “License to Sell”
As a licensed Realtor®/Investor, you can “bridge the gap” between the two.
You see, in residential real estate, you are taught to “find a niche” and become an expert in that area. People who are approaching wholesaling or who have never heard of it as a Realtor® frequently specialize. Their typical areas of specialty can include buyers agents, listing agents, REO agents, Short Sale Specialists, Land/Lot Specialists and more!
It’s dizzying to think that within the real estate spectrum there would be so many choices from which to choose to “find your spot” and “Niche up”.
When you are a Realtor®, choosing to add wholesaling to your “repetoire of services” just makes good business sense. Not every home needs to be listed. Many times, what the homeowner wants is a fast sale. As a Realtor®, you have a unique ability to help them in BOTH ways.
Additionally, as a Realtor®, should the homeowner not be inclined to take your lower than normal price, then you are easily able to convert that appointment into a full fledged listing appointment using The Red Pill Sales System. This allows you the flexibility of never losing a lead!
An additional benefit to being an Investing Realtor® is the implicit trust that the consumer gives you. If you are thoughtful about your approach, you can take this added benefit to your advantage when in competition with the unlicensed. While it is true, some people dislike a Realtor®, Everyone LOVES a Motivated BUYER!
Think about it. When the crowd goes one way, you need to go which way??
Ok, so think this through with me. If Realtors® don’t like dealing with wholesaling investors (A commonly held belief), and Investors think Realtors® are idiots (again, a commonly held belief by many…lol) then doesn’t it make sense then to CONNECT the two?
Here’s the idea…
What if you, as a licensed agent, had regular access to an office where you worked out of? Maybe you worked out of your home, but came into the office and got to be known?
What if you built a network of those agents who became friends and shared the good word about your business… that not only are you a Realtor® (someone who they have under a Code of Ethics with fines, sanctions, etc) that they can trust, but you ALSO buy homes!
What if you became known in your community as “The Investor Friendly Agent” and shared your knowledge in your area with the wholesalers and newer investors? (They will always be around) Wholesalers who are new need someone like you to help train them in sales skills.
How much business could you generate in a year if you actively worked? I could stop right here. How much business could you generate if you just WORKED!!!
Think about it! The potential for you is limitless. With the right broker, the right training, and a “go-getter” attitude, you can accomplish anything! With enough contacts with the right people in your town, you could be getting enough referral business alone to pay for your license!
So My Answer?
Yes. Absolutely. You will never go wrong with knowing more information. It only clouds your thinking if you allow it.
Have a POWERFUL Sales Day!