As a new investor I was thinking about taking a course and obtaining my NJ real estate agent license. I was wondering if this is a good idea or a waste of time in regards to being a real estate investor. The school would basically teach me all about being an agent but I dont know of many agents who have jumped into investing. I figure the course would teach me every thing about real estate but if this were the case, wouldnt all agents become investors?
In general real estate agents have 3 problems when it comes to being a real estate investor. First they don’t believe in real estate. That is because every time they hear about piece of real estate it is from somebody that comes into their office begging them to get them from under this crappy real estate deal. The second reason is that real estate agents don’t have any money. They live from commission to commission but they have to expend large sums of money between those commissions to be attractive enough to attract people to list with them (cars, clothes, country club memberships, etc). The third is what I call the how to date a stripper rule. If you ever want to date a stripper you can’t tip her. No matter how good a catch you may be (good looking, rich, smart) as soon as you tip her you are not a potential date anymore, you are income. Real estate agents can’t invest in real estate because every piece of real estate they see they invision as a potential commission.
LOL, I agree with Bluemoon!
Why bother. “Most” Realtors are highly inexperienced and don’t have a clue about investing.
The agents I know love to tell me how the 1% rule is the way investors should buy property. LOL. That’s a quick way to bankruptcy.
mcinvest-I would disagree with the last two posts. I started in the real estate investing business and about a year in decided to get my RE sales license. I personally have no desire to be a realtor, but I learned ALOT of valuable info from the course that I had to take. My state offers a course over the internet so I didn’t have to go a specific company’s class and listen to their sales pitch, which I wasn’t interested in. You’ll learn all sorts of useful stuff about contract, title law, basic tenant/landlord law, traditional valuation methods, the list goes on and on.
Also, in my opinion, having your license adds an air of legitimacy to your business in the eyes of the public. You sit down with a lender/homeowner/whomever and they hear that you’re a licensed agent and suddenly you’re somewhat more legit in their eyes (maybe you’re not really, but its all about perception). I know some very successful investors who have their licenses, and some that don’t, its not going to make or break your business. If you’re still new to the game, I’d recommend it to get a good base on a bunch of differnt subjects in RE. Plus it could add an additional income stream, maybe working in sales parttime, or doing property management, etc. Good luck!
Bluemoon,
Most of your points are understandable if you are coming from a Real Estate Agent background and trying to be an investor. If you are an investor or that is your main goal, becoming an agent can provide you with tools that you can use to succeed. MLS Access, submitting your offers, being able to offer more because you’ll get part of the commission and you’ll learn real estate law.
No you don’t need your license, but you have to admit it’s a good tool.
There are many disadvantages to an investor who is a Realtor. One thing is you HAVE to tell them you are a Realtor. You are also prohibited from doing MANY of the creative real estate deals that good investors do. If you do them you will be facing very stiff fines sometimes to the tune of 25K or more.
You won’t hear me tell you that the education isn’t worth while, but you have to admit, they do not get trained to become qualified investors. As far as investing goes, MOST realtors are completely clueless.
I was talking to a real estate agent and investor friend of mine. She said that in real estate salesman school, you don’t learn real estate. You learn how to write contracts, how to get clients, law of agency and law of contracts, etc. The closest thing to real estate is how to measure a house and what constitutes a bedroom (it has to have a closet and a window).
You may learn more getting a real estate inspector’s license.
One thing about Houston is that the MLS has a public face. You can actually see on the internet all the houses that are on the MLS for sale or rent without being an agent. You click on the link http://www.har.com/cs_body2.cfm select the type of property and search by attribute. Single family, 3 bedrooms, 2 baths, 2 car garage greater than 2000 sqft under $80k ($40/sqft) and you get all the houses for sale in Houston that match that sort. Just to let you know that houses from that sort will generically rent for $1200/month and the PITI will be around $600/month.
being a realtor is AN ENTIRELY DIFFERENT business - if that’s what you’re going to do. getting your license, just for an “education” is a waste of time.
now i will say this - as a realtor - you DEFINITELY run into deals - and i’m talking DEALS - where if you know what you’re doing - you can make some good money, not face any fines and not be out there extending your credit, or cash or anything crazy like that.
Do you have your sales agent license? If not, how can you say its a waste of time?
The real estate lic course will teach you how to stay out of trouble, how to protect your broker, how to figure out how much commission you are going to be paid, how to tell sellers how much more their property is worth over the fair market value, how to ask for listing reductions, how to identify a bathroom, bedrooms, the kitchen of a house while escorting potential buyers. Your learn other good stuff also; you will learn about office politics, how to get floor duty, how to get out of floor duty, what to do at an open house, how to qualify unqualified prospects, how to ask for seller concessions and what kind of gift to bring to settlement if you ever have one.
OK, serious now, as a starting investor, it is good to have access to MLS, and the bits of knowledge you will pick up in your real estate career, you will be there when the hot under-priced listing comes is. You will learn ethics, how to be a kind and better negotiator and understand a little of the mind set of real estate agents. You will meet many great people in the office and the customers and clients. You make friends and create other relationships. Go for it.
Good luck,
Charles Parrish
Charles,
Don’t forget the BackPocket listings. :rolleyes
John $Cash$ Locke
I too am looking into taking a few RE courses offered buy my local Comm Coll. They’re not expensive, and though I don’t actually plan on getting a license, I do agree that the knowledge should come in very handy! It would also be a source of income until I do get more practiced in making deals! What you ‘seasoned’ professionals have still NOT made clear to me is why GETTING a license would possibly be a LIABILITY as long as I fully disclose!
Knowledge is Power!!
Dana
One possible situation:
You get your license and want to buy an investment property. As an investor, you obviously want this for the least amount of money possible. As a Realtor, you should give your professional opinion of what the property is worth. There could be a difference of thousands between market value for a property and what you’d be willing to pay as an investor.
I got my license almost 2 years ago when I was starting out to become a rehabber. I joined an investor friendly brokerage and bought my first house to rehab. I later sold it and just bought my second home, this one is “buy and hold” until the market gets better down the road. In between my personal investments, I have represented Buyers and Sellers. I have closed 8 transactions thus far and I have 4 more to close by the end of november and one offer pending for a client. The key to remember is that you earn commissions, which can help fund your investor business.
I currently work for a “virtual office”, so all the work is done from home except the house showings, with no desk time. My latest house deal was found on the MLS, I was the first to scope it out and put in an offer. It will be rented by November through sect 8.
I also drove around with “We Buy Houses Cash” signs on my car. I have gotten a few listings off of these signs when I wasn’t in the position to purchase.
I would suggest getting your license if you are in the business. It can’t hurt, especially when it gives you access to the MLS.
If you have planned for this industry and have all the courage then you should go for any school. If it’s for learning only then forget it. Rememeber there’s a lot of hard work to do and hard situation to face. Financial crisis, loan problem, expired offer or even market downturn are some common issues. Not only this but getting good mentors is a big challenge. Experience is a factor. Mostly you have to be commited absolutely. Cause there’s no shortcut for this. Think twice before you do. In this industry there’s no turning back. There’s a lot positive sides too. You can make friends in different related industries, financial institution and people in the field. All the best.
You can obtain your license and use the knowledge you learn during this process to invest. Obtaining the license doesn’t mean you need to be an agent. An analogy would be, you don’t need to drive yourself while you can afford to hire a driver, but it’s good if you have a driver license and know how to drive yourself. An investor with a license is not a bad idea at all.