Should Investors Get a Real Estate License?

Written by Posted On Wednesday, 03 March 2021 20:48

I love this question. Here is my backstory: I essentially did everything you are supposed to do to get a license. From completing the 40 hours of coursework, to studying for and passing the state exam and even interviewing with potential brokers. I was excited to finally start this next chapter of my life and find a brokerage that was a good fit.

But as I was having conversations with these brokers I really began to think about what my goals were. I'll never forget this one time during an interview with a broker where I tried explaining my goal of building a successful wholesaling and flipping business and him just giving me a blank stare in return. I probably tried to explain wholesaling to him three different times, in three different ways, and he just didn't get it. 

Certainly there are investor friendly brokers out there, but most of them will have some expectation that you will bring in revenue to the brokerage either through listings or as a buyers agent. That's how they earn their living, afterall.

There used to be an argument that having a license would benefit you as an investor because you could access the MLS. This may have been true 20 years ago, but in today's world there are literally dozens of apps out there that will  provide you the same data and even more if you are an investor.

If you are a house flipper having a real estate license can benefit you on the disposition stage of your flip. Instead of using a broker you can list the flip house yourself saving you the seller's side commission. But there are ways around this too. Some brokerages offer what is called a "flat fee listing" where you pay a flat fee, usually between $300- $500, to get your listing on the MLS. You will need to handle your own showings but will save thousands in commissions.

There is also an argument to be made, especially if you are a wholesaler, that having your license puts you at more risk legally if a deal were to turn sour. Some of this depends on state laws and where you live. If you are flipping houses and then listing them you will need to disclose in all of your marketing that you are licensed. Whatever avenue you take, always remember: disclosure, disclosure, disclosure!

Bottom line, it really depends on what your goals are in real estate. If you are someone that wants to practice real estate the traditional way and buy your own properties as investments, then get it.

But the answer is no, you don't need a real estate license to be a successful investor. I didn't see value in paying all the state & board fees, MLS fee and office expense fees if I had no intention of listing houses or representing buyers.

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Ryan Dosenberry

Ryan is an entrepreneur, real estate marketer, house flipper, networker, husband and father. He is passionate about providing solutions for sellers and restoring older, outdated homes and bringing them back to life.

 

Lakeshore Home Buyer

Revitalize Grand Rapids

www.lakeshorehomebuyer.com

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