Many people that are interested in flipping houses wonder if they should get a real estate license.
Flipping houses does not require a real estate license, but it helps with almost every aspect of the business. A real estate license opens up a lot more possibilities and provides a great base understanding. Getting a real estate license isn’t complicated and is helpful for anybody in the business of buying and selling properties.
There are a lot of reasons to get a real estate license, and by the end of this article, you will be convinced.
The Benefits of Having a Real Estate License
Having a real estate license has a lot of benefits that are not always talked about. These benefits directly improve the ability that you will have to flip houses.
People looking to flip houses should have a strong understanding of real estate. There is a lot to know if you want to be successful.
Flipping houses has been labeled as a great way to make money. Although this is true, there are many ways to do it where you actually lose money. If you try to flip houses without any knowledge or understanding, you are well on your way to failure.
The real estate licensing process is somewhat intense, but it is designed to be that way so that you are prepared to be a real estate agent. If you are interested in buying and selling real estate, wouldn’t it make sense to learn everything there is to know about the business?
Within your real estate education, you’ll learn a lot of terms and information that can really benefit your house-flipping abilities.
Different people have different talents, and if you really believe that you have what it takes to flip houses, then you should do everything you can to be successful in that field. Having a real estate license is the best way to build a strong foundation for a successful house-flipping business.
Two Revenue Streams and More Money
Want to know the best part about obtaining your real estate license for your house-flipping business? More money!
A real estate license is the best way to make sure that you are making the most money on every house that you flip. A lot of your profit gets eaten by a real estate agent if you don’t do it yourself. Being your own real estate agent means that you can increase your profit margin by thousands of dollars every single time you flip a house. If you intend to do this for a living, then it makes sense to increase that profit margin as much as possible.
Eventually, you might find out that you are good at the real estate agent part of things, and at that point, you can both flip houses as well as help other people buy and sell property. Being good at both can result in a lot of success.
It’s worth noting some states require agents to disclose the fact that they own the house before they flip it, so it’s important to check with your local laws before you put your house on the market.
A real estate broker is a really great asset, especially for people that are new to the real estate game.
When you become a real estate agent, you get hired by a broker. That seems counter-intuitive to the “self-employed” type of lifestyle that many house flippers to be are looking for. I assure you that having a broker is not the typical employer/employee relationship. A broker is basically the person that helps set you up to do your own thing. They take a small cut of all the sales that you make, but they provide a lot of value. A broker wants you to be successful and, therefore, will act as a sort of mentor for you. Their goal is to make sure that you are successful so that they are successful as well.
A broker is going to point out any mistakes you might make and help you to make the correct decisions. There is a sense of comradely that exists between a broker and their agents.
If you are not a real estate agent, you are going to be all on your own trying to buy, renovate, and sell homes. Although working for yourself is great, it really helps to have somebody that is experienced on your side. Your broker will always be a team player; after all, typically, the more property you sell, the more they make.
One last thing that a lot of brokers provide is leads. They will often have their own advertising campaign that will generate leads for you. These leads are really helpful and can make the selling property part of your business way easier.
Access to Other Real Estate Agents
As a real estate agent, you will have a real estate broker that facilitates you. That broker has several agents underneath them that they also help. That means you have teammates of sorts. Some might see this as competition, but in reality, you work together. With the help of other real estate agents, you can be pointed at some properties that might be undervalued or could be vastly improved with some simple renovations.
Just like I discussed with the real estate broker, it is always good to have people on your team. If you are getting started in the business, you need people with experience that you can ask questions. These other real estate agents are going to have a lot of knowledge.
Either way, broker or another real estate agent, the information and help they can provide is really priceless.
Multiple Listing Service Access
The Multiple Listing Service is a database of properties that are on sale or have been sold. This service is only accessible to real estate agents and is very useful for obvious reasons.
There are a lot of free versions of the software out there, but the MLS is the best out there. Because the MLS is only accessible by other agents, you are going to have to pay somebody to list your properties on the service. If you are looking for properties to flip, the MLS is the best place to start.
Those that are diligent in paying attention to what new listings are out there are going to be the ones that get the best properties. If you want to have the first pick on properties, you are going to need access to this service.
A Great Place to Start
If you are looking to start flipping houses, one of the most difficult parts of it is raising capital. Unless you have enough money to buy houses outright, you will need a way to fund your new career. That funding can come from a lender, or it can come from your own pocket. If you are a real estate agent, you can use that extra funding to put down on some property that you are interested in flipping.
It isn’t 100% practical to believe that you are going to be able to buy all the houses you want to flip with cash, but having that extra cash is a great buffer.
You Might Do Better as a Real Estate Agent Anyway
Flipping houses is a really great profession. I know of several people that have done really well for themselves flipping houses, and that’s it. Having a real estate license enhances that process a lot, as we talked about, but being just a real estate agent is awesome in and of itself too.
What’s that Forest Gump quote? “Life is like a box of chocolates. You never know whatcha going get.” Well, this remains true for house flipping and real estate agents. Who knows, if you get your license, you may really learn to love to sell, and next thing you know, you’re doing it full-time.
You Can Also Be Your Own Property Manager
Maybe you do not want to get a real estate license because being a typical agent just is not for you. But what about becoming a property manager?
As I’m sure, many of you know, property managers and house flipping often come hand and hand. Maybe you just fixed up a great property, and the market doesn’t look great to sell, so you decide to rent it out. Often if landlords own multiple properties, they might need to hire a property manager. In many states, you are required to get a real estate license to become a property manager. If that is the case, that is another huge reason to get your real estate license.
Many people like the idea of passive income, so they purchase lots of property and need to hire property managers. Chances are, if you are flipping houses, you are qualified to become a property manager too. You just need a real estate license. Obviously, if you are getting into house flipping, typically, you have a talent for repairing things. So why not become a property manager?
Regardless if you want to flip houses, getting your real estate license and becoming a real estate agent or property manager is a no brainier.
Real Estate License Process
Getting a real estate license can be somewhat intimidating. There are a lot of things that go into it, but that is where we come in. The entire point of our website is to help people through this process. Here are some specific articles that you may want to take a look at:
How to Become a Real Estate Agent
This article will go through each specific state to determine what it takes to get a real estate license. Each state has different requirements, so it is important to know the guidelines for your state.
How Much Do Real Estate Agents Make?
If you are worried that the cost of the license is not worth the benefit, this article is going to break that down for you.
These articles are a great place to start, good luck, and happy flipping!