Is it a good idea to become a real estate agent when you first start investing?

General Real Estate Investing
41

Perhaps your first post here should not be so negative and generalizing. There is a lot more to be considered than just fees, which are a mere pittance at best. Trying to belittle those who don’t agree with you shows a lack of intelligence and maturity. Think a little bit. What you said is wrong because you used wide sweeping generalized categorization.

By your wide sweeping generalization, everyone who is making good money in RE is for becoming an agent, which is of course false. Anytime you use absolutes on a population they are false.

Your post could have come off more intelligent and less hostile by simply stating the facts as you see them.

Here are the good points you mention:

  1. Access to MLS. Ok I like this, but I can do it through an RE agent now who I trust.

  2. Ability to network with people and get the info on properties before they are listed. I do this now and am not an agent. I think it is a good point though because the more agents you know personally the better.

  3. Commission can be applied to the down. Fine point, ESPECIALLY for those who might be cash strapped.

However, you stopped short and forgot to name the CONS. Are there any? I know in Nevada the cons come is you want to sell. Buying is whatever.

If you are an agent, that is super. Tell why you love it and all the super things, but be sure to tell the con side too, even if it is minor.

The fact is if you take away the start and finish of your post and keep the middle, you have some fine points. Believe it or not, there are people who don’t want to deal with RE agents. Why? They feel intimidated. It is the same reason why you don’t roll up to negotiate with an owner in a Hummer wearing an Armani suit. Perception is 90% of the game.

FOR THE RECORD:

I would not recommend anyone just start investing without educating themselves. Like I said earlier. Take the courses, they are cheap enough. If you don’t want to proceed, walk. While any fool can purchase property, not everyone can generate wealth from it. Education will build a solid foundation. Then you can go forward and learn from your mistakes. For all you know, you might end up becoming an RE agent and loving the life. Don’t know unless you try.

42

Everyone debating this may as well face facts, this issue will be like the abortion issue, you will get some that say you should get your license and some who say no.

There have been good points made both ways. I’m sure having MLS access would help, but then comes a question…what about someone who isn’t interested in doing the real estate agent work itself…in other words, for someone who wants to invest, but not be an agent…is there a reason to get licensed? If you work for a broker, don’t you have to do…for lack of a better word, agent work?

And I will say this again, some of the recent posts have turned into pissing matches with name calling and stuff like that, and it is uncalled for. Can we all try to keep this professional? The recent attacks and bashing is pointless and takes away from the forums.

43

JBran,

Since you want to make generalizations, I will be very specific:

You are very misguided.

Getting a seller to agree to a Sub2 or Option - it is a difficult task. Tell them you are an agent, and the difficulty is magnified 100%.

And for the record:

  • I have MLS access.
  • Realtors call me with properties that fit my criteria, before they are listed.
44

Manga,

You’re about as anti RE agent, as Infowell is pro RE agent, and you two will never, ever agree on anything, period. Add to that, that it seems that both of you like to “defend” yourselves, and your posts quickly become pointless and negative. When it gets to the point where you have criticize typo’s (which, btw where Info’s humor, not typo’s) your side “debate” becomes a bit soft.

Your main argument against getting a license, it seems, is because agents aren’t trained well.
As a curious person, I’d have to asked you how well are investors trained? What school(s) do they attend and what credentials do they obtain?

The answer, in most cases, is little and none. Each investor’s knowledge and experience is individual and will vary greatly (as do their people skills, but that’s another debate).

The original question was: I’m just starting out in RE investing and I was wondering if it’s a good idea to become a RE agent first before you start investing
so you can have complete knowledge about Real Estate?

First, let me say that you’re NEVER have COMPLETE knowledge about real estate. RE is an ever changing field, and if you do not continue to educate yourself and keep up to date, your “completel knowledge” becomes useless pretty fast. For example, here in NC, there is a bill (Bill 725) that is probably going to be made into law that will basically govern how investors will and can operate in NC. For those investors not keeping up with this, they will be swept out of business pretty quickly.

Second, taking RE agent school, or becoming an RE agent is not going to teach you how to invest. It’s going to teach you have to become an RE agent. If you want to invest, then you need to learn how to invest.

Third, as you can probably see by now, whether to be an agent or not AND be an investor is very personal choice. Having a license makes you a professional in the eyes of the law. Basically, what this means is that you’re held to a higher standard than a “lay person” dealing in real estate. This is true even if it’s your first day on the job and the “lay person” is an investor with 20 years experience. This is also why you, as an agent, have so many disclosures that the lay person does not. Also, in many states, RE agents have to disclose to the RE commission any and all profits they made off of each RE transaction, and they can be fined for making “excessive” profits. You’ll have to check with your state’s commission.

What it really boils down to each what type of investing are you planning on doing, and will having a RE license hamper or help you in that particular vein of investing?

If your primary focus will dealing with homesellers directly, (pre-foreclosures, shortsales, ‘buying’ via L/O’s, sub2s, etc.) then I feel that having a license will hamper your investing. Here, your disclosures are more important than ever (and where investors, agent or not, should disclose, disclose, disclose), as dealing with “distressed” sellers has a high percentage of possible legal problems. Since an agent is held to a higher standard, you have a greater risk of getting sued, and losing, than a simple investor. Additionally, most states also require that if there is an agent involved in a transaction, then by default, they represent the seller. It’s very hard to represent the seller (getting them the best deal) when you are the buyer. Even if that is not the case, again in most cases, the agent still has to give the sellers an opinion of the current FMV of the property. And again, it makes it much more difficult (though not impossible by any stretch) if you say to a seller, “I think your house is worth about $100K, but I’ll only give you $50K.”

On the flipside, if you are planning on primarily dealing with foreclosures, REOs/bankowned, which are 99% MLS listed, and you are going to primarily rehab and relist, then having a license will probably be a great benefit to your investing career.

This is a bit simplified response, but I hope it helps,

Raj

45

Thanks Raj, good post.

46

“Perhaps your first post here should not be so negative and generalizing. There is a lot more to be considered than just fees, which are a mere pittance at best. Trying to belittle those who don’t agree with you shows a lack of intelligence and maturity. Think a little bit. What you said is wrong because you used wide sweeping generalized categorization.”

Great first post, and ironic that IT’s Agents who’re attacked with frequency.

There are people here (myself included) who’ve a mountain of experience that are regularly confronted when sharing the intracacies of our chosen profession.

Regarding Nevada: I lived & worked there for 10 years. Tahoe, Carson & Reno (that’s were my investment interest began back in ‘84’). I’ve ties to Vegas (will be there this fall for 4 days checking up on things). For anyone interested in what the laws are regarding agency in NV…there’s numerous online Real Estate Schools that will sell you that information over the phone lines or on disk. Check em out for yourself…there’s no law against an Agent Lease/Optioning a property or making a profit.

Getting a seller to agree to a Sub2 or Option - it is a difficult task. Tell them you are an agent, and the difficulty is magnified 100%.

Quite simply NOT TRUE. I’ve NEVER has anyone balk at my offer because I was a Real Estate Agent. It’s all about the money…structure your offer correctly & it’s all yours.

These tales of Agents having their hands tied when it comes to investing are wide spread and not limited to any geographic area. In fact I’ve heard this suggested by other Agents (they quite simply haven’t done the research for themselves).

IF someone did decide to sue (a very real industry hazard) you simply pick up the phone and call the very large, very successful law firm your Broker has on retainer. If you followed the rules (which are quite clearly spelled out) the pro’s FAR outweigh the con’s. In fact I cannot think of any con’s.

“…as Infowell is pro RE agent,”

I’ve had problems with Real Estate Agents myself…I mean I was an Appraiser for crying out loud. Anyone read the Wall Street Journal lately about Lender & Agent Pressure on Appraisers?

However, the Agents (and Lenders for that matter) that caused me anguish as an Appraiser WERE NOT representative of the entire industry.

I read things here from time to time that are so obviously inaccurate and/or slanted that I feel compelled to correct them. It’s not limited to Agency either…I’ve read posts regarding Appraisers & Home/Pest Inspectors that were offered by the unknowing as well.

Some posters are just so opinionated that when one attempts to correct them…they take it personally, and suddenly I’m “just a salesperson.”

-Infowell
MORE THAN “just a salesperson”

47

“There is a lot more to be considered than just fees, which are a mere pittance at best.”

I just got back in from a meeting with a West Coast Builder in which 11 Agents were in attendance.

Looking around the room I thought about this thread & this comment (which has been presented in the past).

The most successful people I’ve known in my 47 years on the plantet are Real Estate Agents. I know & have met quite a few millionaires. They’re definately the most savvy & profitable investors I know & they’re numerous.

It’s true that it can be difficult to break into the business & be successful. It’s true there are a high number of those coming into the business that never ‘make it.’ That’s because, obtaining the license is the first step–after that–the learning curve is straight up.

However, if you’re one of those Agents who’ll make your career happen…the earnings are anything but a pittance…I can assure you (interview some successful Agents for yourself). There are those who make $600-$700-$800k or more annually.

-Infowell

48

Infowell,

I said the FEES, as in what it costs to obtain your license. It is so small, why not at least start taking classes. I said nothing about possible earnings.

Also as to NEVADA, I never said you can’t do LOs or anything. I said that you have to watch what you say here. For example, if I was licensed, I could not say something so true and simple like “This school district is the best in Las Vegas” even if there were mounds of studies supporting that statement.

I really don’t think there is a lose situation here.

I see a lot of people complain that RE agents take deals for themselves before the general public knows about it. If it bothers you, please remember this old saying “If you can’t beat em, join em.”

49

“I said the FEES, as in what it costs to obtain your license. It is so small, why not at least start taking classes. I said nothing about possible earnings.”

Ohhhhhhhhhh!!! :redface:

You’ll have to forgive me…sometimes I feel like I’m in a cyber mosh pit. Looking back…maybe I should have never cited my qualifications (humble apologies).

I’m familiar w/NV & yes…it’s more litigious for Agents than other nearby contiguous states, but the +'s outweigh the -'s in my opinion.

"I see a lot of people complain that RE agents take deals for themselves before the general public knows about it. If it bothers you, please remember this old saying “If you can’t beat em, join em.”

You’re singing to the choir Bruddah! “If you can’t beat em…join em and beat em.”

-Infowell

50

Second, taking RE agent school, or becoming an RE agent is not going to teach you how to invest. It’s going to teach you have to become an RE agent. If you want to invest, then you need to learn how to invest.

What do you suggest to be the best way to learn “how to invest”?

51

I’d like to see a little more involvement from the Moderator’s on these kinds of posts.

This continues, and experience, knowledge & education won’t bother to contribute.

-Infowell

Infowell, it will be a very good idea to read my posts carefully before you respond to it. When you reread the post, you will notice that there question marks at the end of every sentences. I don’t know how you define question marks, but for me it simply means a question is being ask and nothing more. It is unfortunate that you have interpret it to be offensive. I have no control over how you choose to interpret things. Reality is your own interpretation. Also I am not interested in getting into a conflict with anyone. I am simply here to learn and ask questions. I am sorry if I have offended you or anyone else, but I have no control of how you choose to respond/react to things. Thank you for your input and I will take it into consideration.

52

“There is a lot more to be considered than just fees, which are a mere pittance at best.”

I didn’t mention the fees being a real issue. At least not to me. It was simply ONE of my points that the commission from a single sale
would probably nullify them.
I didn’t think the post was that negative. The responses were though. I have just seen too many people claim to be experts and mislead others.
Anyone ever been to a military dentist? They can do more harm than good.
The question was:
“Is it a good idea to become a real estate agent when you first start investing?”
Not:
“What was your experience with a realtor”/what do you think about realtors?/etc"
Some people are posting their experience with realtors, and that has nothing to do with whether or not you should become one. But, it does bring up the point of… if you have such bad experience with one, why not do it yourself??? Then you can blame/praise only yourself for bad/good deals you do. That is the obvious solution to incompetent realtors.
Some of it depends on what market you are in and what you are focused on doing.
Manga:
"And for the record:

  • I have MLS access.
  • Realtors call me with properties that fit my criteria, before they are listed."
    You missed the point. Of course you can go through a realtor to get that stuff. But, you pay for it, a lot. Add up the costs over the course of 10, 50, 100 houses.
    Also, why not at least take the class? You learn the regs in the class… then you can decide whether or not to get licensed. If you are getting second-hand info on what the regs and rules are and using that to determine that you should not get licensed, at least take the class yourself, then you know first-hand.
    I dont think anyone who has not taken the pre-licensing course can determine whether or not it is better to be an agent.
    If you are afraid of saying the wrong thing to people and getting into trouble, sell the houses through another agent and only buy them yourself.
    Problem solved.
53

"If your primary focus will dealing with homesellers directly, (pre-foreclosures, shortsales, ‘buying’ via L/O’s, sub2s, etc.) then I feel that having a license will hamper your investing. Here, your disclosures are more important than ever (and where investors, agent or not, should disclose, disclose, disclose), as dealing with “distressed” sellers has a high percentage of possible legal problems. Since an agent is held to a higher standard, you have a greater risk of getting sued, and losing, than a simple investor. Additionally, most states also require that if there is an agent involved in a transaction, then by default, they represent the seller. It’s very hard to represent the seller (getting them the best deal) when you are the buyer. Even if that is not the case, again in most cases, the agent still has to give the sellers an opinion of the current FMV of the property. And again, it makes it much more difficult (though not impossible by any stretch) if you say to a seller, “I think your house is worth about $100K, but I’ll only give you $50K.”

On the flipside, if you are planning on primarily dealing with foreclosures, REOs/bankowned, which are 99% MLS listed, and you are going to primarily rehab and relist, then having a license will probably be a great benefit to your investing career."

What is “shortsales, L/O’s and sub2s”? Which direction of investing would you say suit a beginner more? Dealing with “foreclosures, REOs/bankowned” or “pre-foreclosures, shortsales, ‘buying’ via L/O’s, sub2s”?

Is it possible for an Agent not be an Agent anymore legally? Let’s play out this senario: I want to deal with “foreclosures, REOs/bankowned” only so I got my license and became an agent. Then one year later, I decide to deal only with “pre-foreclosures, shortsales, ‘buying’ via L/O’s, and sub2s” and don’t want to be an Agent anymore. Is this possible?

54

Thank you for your valuable knowlege! :slight_smile:

55

Well, you’re visiting this website. That’s a start.

On this website, you can find numerous posts, articles and helpful hints that will further your investing knowledge.

Visit your local library and read up on any books that you can find on RE investing, home buying/selling, starting a business, etc.

Visit/join a local area RE club or organization. This is where you will find other, more experienced investors that may be able to help you again further your knowledge of investing.

Raj

56

[b]Raj,

What is “shortsales, L/O’s and sub2s”? Which direction of investing would you say suit a beginner more? Dealing with “foreclosures, REOs/bankowned” or “pre-foreclosures, shortsales, ‘buying’ via L/O’s, sub2s”?

Is it possible for an Agent not be an Agent anymore legally? Let’s play out this senario: I want to deal with “foreclosures, REOs/bankowned” only so I got my license and became an agent. Then one year later, I decide to deal only with “pre-foreclosures, shortsales, ‘buying’ via L/O’s, and sub2s” and don’t want to be an Agent anymore. Is this possible? [/b]

57

Unique,

That’s for the kind words. I do hope I’m helping you at least a little. Maybe a little more when the referee job is done :slight_smile:

I know what I’m about to say isn’t what you really want to hear, though.

I can’t really tell you what RE niche is the best for you (or a beginner, in general). Everyone is different and each style of investing is different, plus I have my preferences above others that you may or may not hold the same. Your personality, amount of available time, knowledge, etc. will greatly determine what you’ll want to, at least initially, pursue.

I’d suggest reading up on the various methods and then narrow down your focus as you get a better understanding of each (No need to get information overload, though. Just a basic understanding will work at this point).

In a nutshell:
Shortsale - when a seller owes more than the property is currently worth, and the lienholder agrees to take less than full value for the loan as payoff in full.

L/O (lease option): A lease with an option to purchase. Primarily used to “sell” a property, but sometimes used to “buy” (quotation marks are because you don’t sell or buy until the option is actually exercised and the deal is then closed out. The correct term would be “control”). Personal opinion: Bad to “buy.” Good to “sell.”

Sub2 (Subject to): When you buy a property “subject to” the existing mortgage. In essense, you take over payments on the loan without formally assuming the loan.

Can you stop being an agent? Yes you can, but your state’s laws will determine WHEN you actually stop being considered a professional in the business. Just because you quit the agency doesn’t mean that you stop being an agent. Each state varies, but even when you license expires, you are still considered an agent/professional for some time after.

Hope it helps,

Raj

58

Unique26,

This is one of those ongoing debates that we see every week or at least once a month it is all personal preferance! Its not that we are not getting involved its just personal. I hope you understand as far as the little bit of conflict as long as there is no name calling we really do not get involved!

Being in this industry for 10+ years now I have my own reasons that I have not become an agent I do belive that the number 1 reason is I do fine without it! hope you understand I just really have nothing to say on this topic!

other then its personal!

If you notice all the realtors say yes and the investors say no that is the way it always has been and it always will be til death do us part!

If you are a realtor and it works for you Great

If you are not and it works for you Great!

If you are and it is not working change it!

if you are not and its not working for you try it!

It is more so about the creative marketing no matter if you are a realtor or not!

Its all about the number of deals not how much you make on each!Because if you are only doing 2 a year at 30k a piece you are worse off then the guy that is doing 30 a month at 3k a piece!

P.S. I hit over 400 post’s evergreen said i get a free pet rock please i.m. me for my mailing address!

Robb

59

[b]Raj,

What you said did not offend me. I have no expectation(for expectations only leads to disappointments) of what you will say or not say. I simple am here to learn, ask questions, be open to everything and not attach to anything. It sounds like in RE there is no one way of doing things. It makes sense now that it is just a matter of what suits me. I will take your advice and read on the different methods of investing. Thank you for explaing things to me. Your time and knowledge is very much appriciated.[/b]

60

Robb,

Your thoughts are well simply put. I like that–staigh to the point. Your explaination have help better understand why things are the way they are. Like you said, we do what works for us. If it doesn’t work, then try something else that will. If it does, then why change something that works just fine? Your 2cents have help me realize that I just have to try and see. I guess we as human fear what we don’t know and sometime we allow this fear to hold us back from trying things. As a result we either miss out on opportunities or become more ignorant than we already are. I will take Raj’s and your advise and just try it out. If it doesn’t work, then try something else that well. Thank you for sharing your experience.