Over the years, I’ve worked with some incredible real estate agents. These powerhouse pros helped me navigate the ins and outs of real estate investing early on, leading me down a path to success—and some truly incredible deals in the process. I could go on for days about how much my agents helped me grow and thrive and how, even now, they’re instrumental members of my A-team—the team that props me up, keeps me on track and ensures that, no matter what, the best deals land on MY desk first. And that’s given me a serious competitive edge.
If you don’t have an investor-friendly real estate agent, that’s your first step: GET ONE. Like I’ve said over and over again, having an investor-friendly real estate agent on your side is a MUST in this industry. This is the person who’s going to go to bat for you day after day, week after week, helping you find and secure the best deals on the best properties. Great real estate agents have solid connections, powerful insights and their finger on the pulse of the market 24/7—and that’s always going to come in handy as you’re building your real estate investing business.
But, more and more, many investors are opting to take things a step further—they’re opting to get their own real estate licenses. And for many of these entrepreneurs, it’s a solid next step giving them a serious edge over the competition. Given the added access, credibility and potential income streams that come with being a licensed real estate agent, this could be a good route to consider whether you’re just starting out, are an established pro or are somewhere in between.
So now the big question: should you get your real estate license? Maybe, but maybe NOT. At the end of the day, it comes down to your market, your goals and where you see your business going now and in the future. There are plenty of pros to getting your own real estate license, but there are also a handful of unique challenges and hurdles to getting the job. It, ultimately, comes down to you and your strategic approach to business building.
PRO: MLS Access
Chances are, the MLS is a huge piece of your business. Real estate investors use MLS resources to look for new investment properties, prepare comps and research markets. It’s easy to use, it’s extremely transparent and it’s free to the public. Anyone can hop on and browse listings, closings and more.
But real estate investors have access that the general public doesn’t. Professional access—available only to licensed real estate agents and brokers—digs a lot deeper, helping inform everything from core business strategies to individual deals to opportunities for expansion. Once you’re licensed, you’ll be able to gain comprehensive MLS access. If you opt not to get licensed, your investor-friendly real estate agent will need to be your go-between, delivering leads, comps and trend information when you need them. Most are happy to do it—but many investors prefer to skip this step and gain direct access themselves.
PRO: You’ll Save—And MAKE—Money
Real estate agent commissions are a huge piece of closing costs. It’s not uncommon to pay 6%-8% to the buyer and seller agents at close. While it may not seem like a lot on a $100,000 property, let’s say, as you start to invest in more and more costly properties, the payouts can be staggering—think $60,000-$80,000 on that million-dollar home.
If you’re a licensed agent, you can dodge those fees—or, in some cases, even scoop up a few bucks by closing those properties. Many real estate investors I know close a few deals on the side as agents. If you can, why not? It’s an added revenue stream for your business. Once you’re licensed, you’re free and clear to make commission on these transactions—what’s not to love?
PRO: You’ll Build a Bigger Network
While you’ll no doubt come into contact with a host of real estate agents and other industry insiders once you start investing, once you earn your license you’ll have even more access to a host of networking events, resources, programming and more. Whether you’re going to flex your agent muscles or not, more contacts are never a bad thing—you’ll widen your circle and no doubt be able to drum up added leads as a result.
PRO: You’ll Build Your Educational Foundation
If you know me, you know I believe real estate is about constant learning. The best real estate investors are students of the industry and the craft, always looking to learn something new. There isn’t a day that goes by when I don’t pick up some little tip, trick or must-try.
By taking the steps to becoming a licensed real estate agent, you’ll gain significant insights and know-how through all your studying, reading and skills training. Even if you’ve been doing this for years, you can always pick up something new. Equally importantly, you’ll gain a new perspective on things. Think about it—you won’t be seeing everything through investor’s eyes but, now, from a broader and more comprehensive viewpoint.
CON: You’ve Got to GET Licensed
Getting your real estate license isn’t some quick hit project on your punch list—you’ve got to work. You’ll spend a good chunk of time reading, studying and prepping, and will have to pay for the testing and licensing. Depending on what exact path you take, there could be extra costs as well—think memberships, association dues and more. If you’re just starting your real estate investing business, this could be a lot to bite off.
While the pros seem to outweigh the cons, this CON—the time and cost tied to getting licensed—is a serious consideration. Depending on your state, costs can range from a few hundred dollars to thousands of dollars when all is said and done. And, again, if you wind up joining a firm or brokerage you’ll no doubt be expected to pay into organizations and associations, attend ongoing training and development sessions and keep your license up to date. It’s a lot to think about—again, you’d be balancing all of this on top of your business. Are you biting off more than you can chew, or is having your license going to pay off in the long-term? Ask yourself, then follow the path that makes the most sense for you and your investing business right now.
We’ll talk real estate licensing at the Nick Vertucci Real Estate Academy (NVREA). Many attendees are already real estate agents, whether they’re active or not. And many aren’t, but are thinking about it. It’s important to understand what the opportunity means, what it doesn’t and how you’ll benefit, plus what’s expected of you if you do pursue this path. It’s an important decision, and I want to make sure you have all the answers.