Real Estate License???
Does anybody have suggestions about the Pros and Cons of getting a license as opposed to just investing? I live in Las Vegas right now where the real estate business is booming like crazy. I want to invest however, i have little money and experience. Would getting a license be better as opposed to buying for example, a subject to course?
It has its pros/cons by being a Licensed Agent you will have to disclose the fact that you are a agent when you are buying/selling property... I was in the same position as you are right now. I have just completed the NJ State Exam for salesperson license, I am going to use that to get my feet wet and then start investing full time.
If you are good friends with an agent you can benefit just as well by going that route since you can get all the cma's and tax info from your friend..
I suggest that a license is helpfull. You do gain a lot of experience in the field. The ability in your chosen area to zip down the street and know the market value of every house on the street and also as time goes on the pros and cons of living in the area.
When you run on a pre foreclosure and you hit the door you have the experience and background to really help. You are there to help and can do more then snatch a house away from someone sliding under the waves. You are in essence a professional. I have found money sources for almost any type of investment. I can make a call and put a bridge loan on and meet the lender at the escrow to expedite. I have attorneys on call to file restraining orders. To hold up a sale while we work it out. When a lender refuses to accept reinstatement I am in a position to file an action and bring them to heel.
I can do an appraisal to conflict with a Brokers Opinion of Value. And I have all the resources of the Realty Board, The Multiple Listing Sources and a special account with the Title Company and all other sources of information.
It is a very large part of how I do business and thats how I operate.
Sincerely, Lucus
so in the words of Bruce Almighty "it's goooooood!"
REbeginner,
Glad to meet you.
As in any profession there are those that do and those that don't. Having spent a considerable amount of time in Las Vegas, I know the shakers and movers in the real estate business there.
There are about 12,000 + licensed agents in Vegas, and I would say that only a small amount of them are making any money. The national average of wages for real estate agents is $7,000 per year. Why? Like in most business's 20% are doers, the other 80% just hang on and hope for a deal now and then.
There is nothing any licensed Realtor can get in the way of information or contacts that I can't get or have at my disposal, as a matter of fact the real estate agents that have attended my workshops had no idea about the information they were over looking every day that would get them deals that I showed them.
It will take you many years to develop a client base or even get off the bottom of the totum pole at any brokers office.
Creative real estate investing with the proper knowledge and knowing how to apply the knowledge will put you way ahead of the real estate game.
Of course this is only my humble opinion.
John $Cash$ Locke
What do you think about simply taking the real estate classes but not getting the licence as a way of "getting your feet wet"?
Thanks,
pataz
Taking the courses is not a bad idea from my prospective. It gives a good idea of the processes involved in real estate transactions and also give you an idea of some of your state laws governing real estate.
_________________
RS (So. CA)[ Edited by Rogue on Date 01/05/2004 ]
JohnLocke, I disagree in part with your post. I don't know the source for your statement that the national average of wages for real estate agents is $7,000 per year. According to the 2003 Member Profile of the National Association of Realtors (NAR), the median gross personal income for 2002 of brokers nationwide was $65,300 and for agents was $39,300. NAR obtained this and other data from a survey it conducted in 2003 of its members (who currently number in excess of 950,000).
The mere holding of a license (real estate or otherwise) does not automatically confer wisdom or competence. The mere undertaking of work, whether it is real estate investment or real estate brokerage, provides no guarantee of success to the worker. Success in any endeavor requires hard work, commitment, guts and a little luck.
No having a license doesn't automatically make you a whiz at anything. And to be honest, it's not very difficult to get your real estate agent license. And I would agree that the average income for a realtor is more than $7,000.... heck i'm sure most spend more than that in advertising. Now I think there was a figure something to the effect of 50% of new realtors quit the first year. But, what most people do not realize is the cost of getting started. No, not just the $1500-$2000 initial fee, but the advertising, the time spent talking to non-serious buyers/sellers, etc. And it doesn't necessarily take years to do well at it either.. I know a friend that started two months ago and has had two listings sell and three most listed. Why? He knows a lot of people. He made a few grand bringing together a buyer and a seller. I just started two weeks ago, did my first mailing saturday, and have had two calls already that are awaiting preapproval(hopefully) with a mortgage broker. Just with anything in life, it's who you know and what you're willing to do for it.
Chase
Hey Pataz,
That is a great idea to go to Real Estate school for experience Like John Locke says, there are tons of realtors in Vegas as it is. But why not know what they know?
Thanks!!
Taking the license does not mean that you have to trot along with the Herd. I am very much against that and suggest that the more stuff you can imput in your head the better off you will be.
These are rather unconventual times and the thought of just representing Buyers and Sellers is boring and I do not think really profitable. Now think for a minute.
You go along with your Broker on a Caravan and he shows you this C-2 property that the office has just listed. Oh he is so proud. The car stops he points with pride and blah blah blah.
While he is stroking the group, you very carefully write down the address of the properties on either side, go on do it and then go out and write down the addresses of the next ones on either side of those. Now what are you going to do?
Right on you will go home and call those other property owners and see if you can Buy, Option, List, whatever. Tie them up anyway you can. Now what have you got. A telephone bill. No No stop funning. You have just started an assemblage. Little C-2 one by one are worth so much. But little C-2's in multiples become biggy C-2's and biggy C-2's is where the money lies, er lays er whatever.
So which would you rather be the friendly Broker shukin and jiving with the troops, or the little newbie with the shart pencil and the big telephone bill? No No No not the Broker, he is doing his Broker thing. You fellow newbie are doing your thing. Right On Creative Real Estate and that is the path to glory, er a well at least a little more money.
Enjoy, newbie Lucius
If it was anyone other than Lufos, my friend and mentor, I would hurl invectives in that direction because it aint necessarily so.
Taking the licensing courses doesn't qualify anyone for much other than passing the state's licensing requirement.
Pataz, rather than take the R.E. licensure courses you would be miles ahead by taking a good R.E. investment course.
I don't know what the median income for agents is, but I assure you that it's a gross figure after deducting all expenses, there isn't much more net left than McDonalds salary. In one transaction- you can equal that amount.
It's sad that a new agent lives off his friends, relatives, and associates. When those resources are exhausted, many are then ready for the exit cycle.
The long and the short of it is that the majority of agents just work for tips.
NancyChadwick,
I stand corrected, however ask anyone what they make, then look at what they really make.
Maybe I am figuring out what the hourly wage would equal, considering they work a boiler room calling FSBO's (known as your turn in the barrel) chase around with tire kickers all day and the list goes on.
You ask why, well let me tell you, I have never used a real estate agent to buy or sell a house ever.
When I would run my Subject To ads to sell a property, the real estate boiler rooms would waste my time with the "what happens if your house does not sell in 30 days" or the "How long will you have your house on the market until you will entertain listing it." The same script I think used by all.
Then the "my sister is in town looking for a house in the area you have advertised." If I heard this once must have heard it 100 times.
I have found the credibility pretty poor in general, however there are always the exceptions as in any industry. I have met the ones that have a client base after sucessfully gaining respect in the community and treating their profession in a professional matter, my hats off to these agents.
Two words "Wal Mart" is coming.
John $Cash$ Locke
John $Cash$ Locke
How much does your program costs? And, are there any references out there for ?John $Cash$ Locke
esuccess,
Glad to meet you.
You can read some reviews here on TCI.
http://www.thecreativeinvestor.com/modules.php?name=Reviews
My Training Manual is $189.00
http://www.thecreativeinvestor.com/Product19-Subject_To_Training_Manual.html
John $Cash$ Locke
sammyvegas, Is there any course in particular that you would recommend for the newbies?
Thanks,
pataz
Lucius,
I have to say that your post is one of the best and most true and accurate posts I have ever, ever read here about what it is to be an agent. I recently got my license about 5 months ago and it has changed my life and financial state of affairs like you would not believe. What you describe Lucius is JUST what a smart agent does and what a new agent needs to do. You do NOT have to follow the herd. In fact, following the herd will get you pretty much no where but in a field of cow patties. Same goes for all the "subject to's." So I will be honest. I have had my license for 5 months. At the current moment I have closed three building lots which were not a big deal at all. But, I have a total of $5.6 million in other properties under contract, with $3.8 million about to close in a couple of weeks and the rest in the summer. I work only with raw land and do large commercial and residential development tracts that cost more than I could ever possibly afford. I sure can't buy them but I will help sell them all day long! Matter of fact, my very first deal as an agent was an 11 parcel assembly of land that started with a phone call to one owner and it just kept rolling. That "little" vacant commercial lot got REAL big quick and boom 3 weeks later I had a $4 million listing/assembly. Lucius, what you say about being a smart agent is so true. There is so much money to be made as an agent if you are smart and think outside the box. And I don't have to worry about subject to's or preforclosure or any of that stress. And happily, I do not appear to have a single open house in my future! I probably would not ever bother being an agent in the home resale market. THere is so much money in land and commercial sales. Shhh though...don't tell all the other agents. THe lack of competition is great!
Anyway, Three Cheers for Lucius for a great post with much truth in it!
Quote:
On 2004-01-05 21:36, Lufos wrote:
Taking the license does not mean that you have to trot along with the Herd. I am very much against that and suggest that the more stuff you can imput in your head the better off you will be.
These are rather unconventual times and the thought of just representing Buyers and Sellers is boring and I do not think really profitable. Now think for a minute.
You go along with your Broker on a Caravan and he shows you this C-2 property that the office has just listed. Oh he is so proud. The car stops he points with pride and blah blah blah.
While he is stroking the group, you very carefully write down the address of the properties on either side, go on do it and then go out and write down the addresses of the next ones on either side of those. Now what are you going to do?
Right on you will go home and call those other property owners and see if you can Buy, Option, List, whatever. Tie them up anyway you can. Now what have you got. A telephone bill. No No stop funning. You have just started an assemblage. Little C-2 one by one are worth so much. But little C-2's in multiples become biggy C-2's and biggy C-2's is where the money lies, er lays er whatever.
So which would you rather be the friendly Broker shukin and jiving with the troops, or the little newbie with the shart pencil and the big telephone bill? No No No not the Broker, he is doing his Broker thing. You fellow newbie are doing your thing. Right On Creative Real Estate and that is the path to glory, er a well at least a little more money.
Enjoy, newbie Lucius <IMG SRC="images/forum/smilies/icon_cool.gif"> <IMG SRC="images/forum/smilies/icon_cool.gif">
[ Edited by woodsong on Date 01/07/2004 ]
Woodsong, I wonder what state are you in? I am in California, Bay Area. Single family houses sell for 400-500K - the cheapest places; in better neigbourhoods SFH goes for a million or so, and in Hillsborough and Los Altos Hills they are over 2 millions. A realtor I know asked me recently if I have a buyer for 10 million house, she was ready to split her commission. Commercial properties here stay unoccupied, because tons of companies went out of business. For lease signs are everywhere. Would you buy a commercial property so you cannot lease it an make money out of it? I would not.
My point is - yes you can make that much money selling SFH or re-selling it.
Less likely you'll be able to make same money sellng commercal propertes HERE.
Now. I do not understand why so many people having a dilemma TO HAVE a LlCENCE OR NOT TO HAVE.
Let me just give you an example. 3.5 years ago, when hi-tech was booming, it was quite easy for foreigners holding working visas in hi-tech to apply for Green Card and get it in 1-2 years. I am a foreigner. I was not sure that I need it, I planned to go home and wash my pigs, or move to socialist Canada where Green Card and citizenship are easily obtainable for skilled folks. Anyway, neither I nor my husband applied. 2 years ago (1.5 years later) we decided to apply for GC because we wanted it now, but the time has changed we are going to wait for it for another year or two.
My point is, if you can pick up something along the way, why to leave it on the road? If you're learning real estate anyway and have an opportunity to obtain a license, this would be a stupid thing not to do so. In my opinion. I am going to get it.
I enrolled to college to take 2 courses:
1. Legal aspects of real estate - Bob Bruss is a teacher there. I hope I will learn not only California real estate law, but will learn from one of the biggest investors around here.
2. Real estate valuation. The text book for this course is "Essentials of Real Estate Investment". The teacher, I bet, also an experienced investor, may be not that well known as Bob Bruss.
Will my college education (entire semester) at least equal to any of the courses selling here? Figure yourself. As for the cost: I paid for it $128 for both courses + $24 for parking + $64 for books.
Would license fee stop me from getting a license? I do not think so.
I read here John Locke mentioned herds of real estate agents in Las Vegas getting paid 7K / year each. That is certainly the same in San Jose, Bay Area. BUT... How many of you, reading this post or visiting this site are ACTUALLY doing any creative investing? Compare it to real estate agents not doing any deals. John Locke was incorrect saying that only 20% of real estate brokers sell 80% of properties. NO, it is 10% of brokers sell 80% of properties! How to be in that 10% is to be learned from those who are in top 1%. The same way you're trying to learn investment strategies from top 1% investors.
[ Edited by Olga on Date 01/07/2004 ]
I just love for sale by owners. Of course I do not charge them a commission. I just knock on their door, look around their house and offer it for sale to those persons who want such a house. How do I get paid, well for a For Sale By Owner I average about 10% of the selling price.
Very simple I make my offers NET Offers.
I bargain away reducing the price, playing every game that my skills will allow on the FSBO. I really like the ones that infer that because I am a Real Estate Broker I must be deficient either in some social or educational level.
In any case I get an acceptance of an offer to buy and believe me those are the best deal my client will ever get, cause I got credits for almost anything that was negative. Carpet wrong color and worn in one spot. Deduct for new carpeting. The sink has evidence of prior failure, Deduct for a plumbing correction. and on and on it goes. On the Inspection of the property by a contractor, guess who hired the contractor. Me. On the appraiser who appraises for a new loan I hire him and I may have him come in low so that the owner to make the deal has to participate in some form of financing. Its lots of fun. also my commission it being a net deal is much higher as I said usualy about 10% of the purchase price. Good deal for my buyer cause I really worked the price down. Also I work on the costs of the escrow. My client gets all the discounts I can manage and the Seller is in business for himself so he does not get the breaks on Escrow Fees, Title Fees, Recording Fees, etc. etc etc.
I really had fun with one where the FSBO after extensive bargaining became super stubborn. So I suggested that if he would take a second back at the same interest rate as the first I could get the price that he was now fixed upon. Well he did.
About six months after close I bought that note for a 50% discount. I took a small mark up the note transaction and arranged an equity loan for the new buyer and recovered my advances.
The Morale of this story, sometimes it may pay you to deal with a professional when you go to sell your house. You might get a better price and at least you have someone working for you who is a little more objective then you the dear and friendly houseowner.
The end. Lucius
JohnLocke,
It's unfortunate that you feel that real estate agents in your marketplace generally lack credibility and professionalism, and that the good ones are the exception and not the rule. Fortunately, over 21 years I have known (and trained) many PA agents who apparently in your area would be considered professional stand-outs.
Contrary to what some on this site may believe, it isn't easy to get a real estate sales license (and it's even tougher to earn a broker's license). The standards differ from state to state, and perhaps in your state, the standards are lower than they are here in PA.
I responded to your post, not to convince you or anyone else that you should employ agents for house buying and selling, but merely to advise you that the annual income figure you used of $7,000 is way, way off based on NAR and other published studies. It is true that anyone can "puff" their income figures, and of course, that includes real estate investors.
The are always the positives and negative in everything. Dealing in this business I believe you should always, repeat- always, keep a completely open mind and be ready to accept new and creative strategies.
On the insistence of my RE Agent - yes my agent whom will lose her commission - I believe I will get my license this year. I love working with her and her broker thinks I can build palaces in the sky (and maybe I can) but she says I could do so much more with a license without the commissions and waiting for info from her or the others in the office. She believes I am wasting my creative talents and would be much more productive when I don't have to work through someone else. Our area is not investor friendly and with all the RE businesses bad mouthing investors (some of them are actually investors too, but using or misusing their "professional" license to mislead sellers and buyers alike)
I am beginning to see some truth in her words and tickled to pieces about her want me to join the "agent/broker" community and show them all.
I think no education is wasted. If you get your license you can always drop it if it becomes a roadblock. But you must be able to believe in what you are trying to accomplish regardless of whether or not you choose this route or another toward your goal.
No door left unopened no stone left unturned..........
NancyChadwick,
I noticed on the 5th of this month you stated in a post there were over 950,000 members of the NAR.
It is two days later and I just checked their web site. NAR says there are:
The National Association of Realtor® , "The Voice for Real Estate," is America's largest trade association, representing over "840,000" members involved in all aspects of the residential and commercial real estate industries.
So a loss of 110,000 members in two days tells me why you train agents, you really must be busy.
Nancy, I am just having a little fun here, everyone should defend their method's, which you have aptly done.
So are you coming to the TCI Convention, it would be my pleasure to meet you.
John $Cash$ Locke
Well now, JohnLocke, I may not be a great math wiz, but I've always thought that 950,000 was over 840,000!
(Actually, to be precise, as of 12/31/03, NAR's membership was 976,960. I don't know how often it updates some portions of its website.)
But in the interests of full disclosure...My real specialty is land, not houses, and I would venture to say that the total number of NAR members who are truly land-savvy is a veritable drop in that bucket of 976,960.
As for coming to the convention, Joel had asked me to be a speaker, and we're still talking about my doing that. I would be pleased to meet you, too.
And also, when you get into the CREI you forget about the hundreds of thousands of normal, conventional families out there that go to work 8-5 make a base salary and buy a house every 5-10 years. THOSE are the people that agents make their money off of. It's a whole different clientele. Grr I just got a call from a place called www.servicemagic.com as a matter of fact. Anyone heard about them? They charge $150 to sign up and give you a $300 credit towards leads(8-10 leads). Then it's 30-60 per lead depending on their situation. Who knows. Just like any business, whether it be investing or being a real estate agent, it's all about how SMART you work.
Chase
I do not believe it is worth anyones time or money to take a real estate licence course to "get your feet wet". The class will only teach you how to pass the test.
Better to take a credible R.E. investing course - or read some of the classic real estate how to books.
Gregg
[addsig]