“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Posted: 11/23/2015 12:09 pm EST Updated: 11/23/2015 12:59 pm EST
An early question many people have if they’re getting serious about actively investing in real estate is whether to get a real estate license or not. After all, if you’re out there buying and selling homes, it can be great to save the commissions and increase your income on every deal. Especially with fix and flip, there can be some decent savings if you can avoid using real estate agent commissions.
Many Deals Avoid Agents Anyway
If you’re marketing to attract distressed sellers, or if you’re using a lease-purchase strategy, you’re usually dealing directly with the seller anyway, so there is no real estate agent involved. If you’re flipping to another investor, the same thing applies. If you’re buying and fixing to hold for rental property, you may end up with commissions if it’s a listed foreclosure, but they’re generally lower because the lender selling the home negotiated it that way.
So, unless you’re doing a lot of deals with real estate agents involved on one or both ends, you’re generally not going to see a major savings or income boost if you get your license. An exception could be if you are using an investor or investor group and guaranteeing them a specific return on deals. If you are, and your commission as the agent is a valid cost in the deal, it could be extra income for you.
There’s Time and Money in Maintaining a License
Real estate laws vary by state. But, in almost every state, the licensing laws require upfront license fees and periodic renewals, often in the hundreds of dollars. You’ll have local MLS, Multiple Listing Service, dues to access the listings. Many of these associations require membership in the National Association of Realtors, another annual fee. One broker added up just the licensing and MLS fees and found that his costs were around $1,500 per year.
Many states also require bonding and or insurance to practice. The same broker had an annual premium of around $350 for required insurance, and it couldn’t be shopped much, as the state mandated that only companies were to be used. Now, if you aren’t doing any active real estate other than for yourself, that’s probably all you’ll have out of pocket. However, in most states you must work under the supervision of a broker, and they will not want to take on a part-timer without some compensation. This can be a percentage of each commission or monthly desk fees.
Now let’s talk about the annual Continuing Education requirements. These vary, but usually require around 30 mandatory renewal hours in classes mandated by the state. So, you have the costs for those as well. These may be annual or for a two or three-year license period. So, just to maintain an active real estate license, you will have significant out-of-pocket costs.
In most states you can do your own deals and not be forced to hire a real estate agent. You’re considered to be in charge of your affairs and the risk is yours. However, once you have that license, things change. Your dealings with that seller and buyer will be considered as giving you an advantage with your license training. You pick up some liability in the transaction if anything goes wrong. You are subject to complaints with the state and even lawsuits in extreme cases.
Well, I’m done selling you on getting a license! Actually, in some cases it can be an advantage, but in the majority of investor deals, even fix and flip, it’s usually not going to yield enough to be worth the added cost, invested time and risk.
Phoenix Commercial Real Estate and Investment Real Estate: investors and Owner / Users need to really know the market today before making a move in Commercial Properties or Investment Properties in Phoenix / Tucson / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land in Phoenix / Tucson / Arizona. Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties.
I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international. Click here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail email@example.com or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
2821 E. Camelback Rd. Suite 600
Phoenix , AZ 85016
Delivering the New Standard of Excellence in Commercial Real Estate
- Commercial Real Estate Scottsdale
- Commercial Real Estate Phoenix
- Commercial Real Estate Arizona
- Commercial Investment Properties Phoenix
- Commercial Investment Properties Scottsdale
- Commercial Investment Properties Arizona
- Land Specialist Arizona
- Arizona Land Specialist
- Land Specialist Phoenix
- Phoenix Land Specialist
- Land For Sale Phoenix
- Land for sale Arizona
- Commercial Properties For Sale Phoenix
- Commercial Real Estate Sales Phoenix
- Commercial Properties Phoenix
- Commercial Properties Arizona
- Commercial Land Specialist Phoenix
- Commercial Land Phoenix
- Multifamily land Phoenix
- Retail Land Phoenix
- Industrial Land Phoenix
- Land Commercial Phoenix
- Land Retail Phoenix
- Land Industrial Phoenix
- Land Multifamily Phoenix
- Industrial Land for sale Phoenix
- Land Industrial
- Investment Real Estate
Disclaimer of Liability
The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.