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Can A Real Estate Agent Be An Investor?

Want to make flipping houses your new side gig? There’s no need for a professional certification, but it may be worth getting licensed if you plan on doing this often.

Here are some real estate agent advantages and disadvantages

Pros:

The license will give you more credibility in some cases as well as allow access to certain tools that other agents don’t have available (think data).

You’ll also get discounts from marketing vendors like Docusign or Mailchimp. However, there is still plenty of work where licensing doesn’t matter at all – so do what feels right!

If you’re considering becoming a licensed real estate agent in order to learn how to start house flipping, then this may not be the best reason to begin flipping houses.

Most people don’t become experts by becoming an agent, they become an expert by learning from a more seasoned investor.    the primary reason to becoming a licensed real estate agents and investor is to make more money.

Profit margins in this type of business aren’t huge–generally 10 to 20% or so profit from invested capital (purchase plus repairs). Commissions typically range somewhere between 6-8%, with your share split up between you and the other agent.

real estate investor

The Multiple Listing Service (MLS)

The MLS is an amazing resource for both buyers and sellers alike! You’ll be privy to information that’s unavailable outside of the business-related sites. Just think about all those awesome information.

Every listing at your fingertips (literally); know when new listings hit the market before everyone else does… Think about how great it would feel knowing you’re ahead of competitors?

Cons

Financial Investment

There is a cost associated to being a licensed real estate agent and the costs vary significantly from state-to-state, but it’s fair to expect at least $1,000 in out of pocket expenses. Between education requirements, licensing exams, background checks (and other necessary or beneficial expenditures) startup fees can reach as high as $2k+.

Education

There are marked discrepancies in educational requirements for licensed real estate agents depending on which state you live in. Some states only require a mere 18 hours, while others demand as many as 180!

In addition to the financial burden and opportunity cost associated with such large differences, consider how much time it will take to become qualified enough (180 hrs!)

And lastly–because every state has an education requirement as well as examination requirements before one can get their real estate license—you’ll build a better knowledge about the real estate process when it comes time to buying or selling property.

That includes understanding contracts (which may be different depending on whether you’re dealing with residential properties vs commercial), what happens if something goes wrong during escrow/closing, dealing with probate real estate, tax liens etc……

In Conclusion

For many people, flipping houses is a dream job. However, it’s not for everyone and needs to be taken seriously if you’re going into this business as your main profession.

For those who are looking at house flipping only as a hobby or secondary source of income the benefits more than outweigh the drawbacks when it comes to getting a real estate license

In short: becoming an agent certainly has its advantages for house flippers—you just have to decide if you wish to become an investor or a license real estate agent, or both.

What do you think?

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