Congratulations on choosing to become a real estate investor! It’s a good choice that you’ve made and a gutsy one at that. You could make a whole lot of money doing this.
Becoming a licensed real estate agent has its advantages and dis advantages. For one thing when you become licensed you have access to the MLS if you join and a good basic real estate education. You don’t need to rely on anyone else to get you comps, get access to properties and make offers for you. You can act for and by yourself in all your transactions.
Where the disadvantages come in is the additional liability it could cause you when acting as a principal. The problem begins when you disclose that you’re a licensee which opens you up to liability and risks because now you have a license to protect. This disclosure could also cause confusion to the parties involved in your transactions. Another problem, if you work under a broker, you could be expected to become a Realtor® (join the Board of Realtors) and be subjected to their Codes of Ethics which could further limit your ability to do investor type transactions for yourself.
My opinion is that, if you choose to focus on real estate investing for your own account, then a license is not necessary and not needed. You can function on your own behalf well since you also have access to the same information as Realtors® do through other data sources, you can get forms and information everywhere through technology. If you’re already licensed, then keep it current and hang it with a 100% no split broker. They’re all over just search the internet. Of course if you are licensed broker then you have your own business with no one over you, then you can do whatever you want, within the law of course. If you are not licensed, then pay attention to the following.
If you love doing your own research and choose a more hands-on administrative role in your transactions, having access to the MLS, pulling your own comps, having direct access to properties and making your own offers, then it might make sense to be licensed. Being licensed gives you the opportunity to take advantage of the occasional deal that does not makes sense or doesn’t fit your buying criteria. Instead of passing on the deal you could list it and earn a commission check. You might decide that the brokerage side is better for you after all and to make your income first as a real estate agent, focusing more on brokering deals as your primary career. You should know that having your real estate license limits you because it causes you to become close minded to creative deals because your focus will be on protecting your license. Sorry, I see this all the time where investors become more confused because of the “realty world” of information that they ingest which by the way has nothing to do with creative real estate investing. I can tell you from experience; it is difficult to do both.
Bottom line, it depends on your strategy and the business you want to run. Whether wholesale, rehab fix and flip, lease options, buy and hold, if you leave the administrative role to others that gives you the opportunity to concentrate on the business of dealing and investing – analyzing deals and making offers not on research and paperwork.
My opinion, keep it if you have it but don’t bother getting licensed if you don’t.