Real Estate License?

[Hardwire]

Is it a good idea to a RE license in Texas to flip homes. I know it is not necessary but just to have the knowledge seems smart. Do the online schools have a bad rap? Please help, Thanks

[Dan Auito]

Is it a good idea to a RE license in Texas to flip homes. I know it is not necessary but just to have the knowledge seems smart. Do the online schools have a bad rap? Please help, Thanks

Hardwire, I always try and dissuade folks from getting a real estate license if they don't want to strictly be an agent, the reason for that is if your also an investor the rules, ethics, disclosure of agent status and the barriers that go up when you talk to the public can really hamper your efforts.

Many investors get a real estate license only to have access to the MLS but hey you can have your spouse or significant other get the license and then you can use the MLS without having to disclose you being an agent, because you wouldn't be!

Another thing I mention is go to an appraisal class and learn to think like an appraiser, these folks are trained to recognize value and as an investor this can pay BIG dividends, plus you make improvements to properties that appraisers find valuable (imagine that).

A real estate license can hold you back. I have two and am on the fence about keeping either one active for the reasons stated. Also went to appraisal school but don't want to be an appraiser either, stick to being an active investor, that is where the real money is at.

P.S. Always sell and manage your own property as well.

[Hardwire]

Thanks for the response, I had the notion that the laws of contracts and such would be helpful to someone that is new to the business.

[Dan Auito]

Thanks for the response, I had the notion that the laws of contracts and such would be helpful to someone that is new to the business.

You would learn more from hanging out with a real estate attorney for a weekend about contracts then you would from 8 weeks in a real estate class. :SM134:

[Aldo]

I could have had a license a lot of years ago, but chose not to do that for a number of reasons. Spending a weekend with a R.E. atty can be helpful, but is not realistic. If in your position, I'd consider attending the classes (preferrably no online) and not applying for the license. You may learn more than you need to know for your own purposes, but it's always better to know too much than not enough.

[John@TheLPA]

Hi Aldo,
As a real estate broker for 25 years, I have to agree with Dan. The license does subject you to higher standards of practice, disclosure, fiduciary relationships, etc., when not having a license does not limit you. You have the freedom to be a full time investor.

I think you should have a real estate license if you want to work in the business selling and lising properties for commissions and also working as an investor. Then you have 2 lines of work that compliment each other, making you more effective. But I wouldn't bother with a license if I only wanted to be an investor.
John

[JoefromPhilly]

A lot of people want to get into real estate and go to take the two classes. What many of them don't know is how much it costs to become a Realtor! Here is a breakdown of what it costs in PA:

2 Classes: - $450
Books: - $60
Prep Class: - $50
PSI Exam: - $52 (over 50% of test takers fail the first time and have to pay the $50 all over again to retake the test).
PA License Fee: $100
Board of Realtors Fee: - $400
6 Month's Membership to Trend (MLS): $126
E & O Insurance: - $400
Agency Training: $50 to $200
-----------------------------------------
Total: Average of $1800

Next, you have to spend more money to market yourself to the public to get your first listings. That is easily another $300 or more. So, to get started as an agent can cost you over $2100! With over 80% of new agents failing out in the first few months, it is amazing that the real estate classes are always packed. What a racket!

[Dan Auito]

Joe you are cracking me up. How right you are my friend. Those where conservative figures folks. But Joe maintains an understated posture. :praise:

[Hillmdy1]

Hi Folks,
I am in Philly And I just returned from Philadelphia Housing authorities weekly Section 8 breifing.The program requires you to obtain a renters lic. To obtain housing assistance payments you must complete an IRS W-9. does this hinder my tax advantages I have just dealing with the private sector? Or can I play both sides of the fence,since this is a renters license not a realestate lic? I have a couple sec.8 approved units in mind that are a good return but I still want to keep my private sector options open just in case the sec. 8 route isn't the one for me.
Thanks For your help!

[dealmaker]

You asked:

must complete an IRS W-9. does this hinder my tax advantages

What tax advantages would those be? The W-9 is so they can report to the TAXING authorities how muc GROSS INCOME they paid you in the course of a year. The IRS sometimes considers "overreporting (read creative) expenses to be a "minor" crime. They understand that sometimes there may be gray areas of whether something should be "expensed" or capitalized. On the subject of INCOME there is no gray area. ALL INCOME must be reported, and is TAXABLE, from whatever source derived.

IOW, if the city is paying you $1,000/month, your income side needs to show $12,000 annual receipts. If family is paying you $1,000/month some unscrupulous landlords have been known to report that as $10,000 annual receipts. It's a big NO NO.

since this is a renters license not a realestate lic?

I'm sure it's just something so they KNOW that you have studied and understand all the rules on upkeep, maintenance, fair housing etc. They want to make sure that the landlords to whom the city is paying rent meet some minimal standards.

dealmaker