Monday, November 5, 2012

Should Investors get real estate license?

Is it a good idea for property investors to get their real estate license? 
I would say that it is a good idea in most cases and it can be extremely useful for new investors.  Getting a license requires learning a great deal about real estate.  It can be a tremendous advantage to do the course work for testing.  I have expanded on this idea below and included a few reasons why I think it could be a great idea to get your real estate license. 

Real Estate License allows for collecting commisions on your purchases.  These funds often can be used as part of your down payment. 

One of the smartest things the new investor can do is to obtain a real estate license. If you are a seasoned investor and doing additonal transaction flips along with investing in cash flowing properties you might not want to go this route. However, starting out with your real estate license is one of the best ways to have acess to the best deals. It also is one of the best ways to get a quick source of fuding for your down payments. You can use your commission as part of the down payment or even for all if it in some cases.

It is possible to structure deals that will pay a higher commission if you add to the sales price in order to bring less out of pocket cash to the table. Often sellers are open to this type of deal if you can make it attractive enough to them. If you want an extra $5000 in commission then offer $6000 higher price and see if they are interested. Certain brokers will let you keep all the commission on any of your own property purchases. They are very happy to have you getting into the business and it helps build a solid relationship between broker and sales agents.

It is a little work to get a real estate license but it just takes a bit of study. You can attend classes if you like or often just taking a home study course is all that is required. If you love real estate it is a small price to pay to be able to get plenty of extra money for investing and for your down payments.

This is just one of the ways you can get down payment money. There are ways to buy with no money down but those deals are harder to find, especially during times of low inventory. When real estate is hot it is particularly hard to find no money down deals but when it goes cold you can find plenty of owners willing to negotiate on terms.

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