Being a successful entrepreneur in any industry requires determination, motivation, confidence, creativity and effective time management, but growing your successful fix-and-flip business also requires an extremely diverse set of additional skills--including the ability to:
- find listed and off-list properties with sufficient profit potential
- quickly and accurately estimate property value opens in a new window
- quickly and accurately determine property condition and renovation costs
- negotiate purchase contracts
- build and maintain a team of contractors opens in a new window, vendors and other professionals to support your fix-and-flip company's success
- find and secure financing, if needed
- quickly list, market and sell your renovated properties
- build your fix-and-flip business and protect its reputation
Once you've worked hard to get all of this fix-and-flip know-how under your belt, you may be wondering if it is worth the time and effort required to become a licensed real estate agent--and if having that license will add value to your company in any important ways.
While you are contemplating whether or not to invest your time and money into pursuing your real estate license, consider these four ways a real estate license can help you build a successful fix-and-flip investing business:
If you have ever spotted a great fix-and-flip property and had to calendar a meeting with a local real estate agent to get inside to take a look at it, you know how much more convenient it could be if you were your own agent in these circumstances. In hot markets where competition for viable properties can be fierce, the time it takes to coordinate with a local real estate agent to find and view a potential fix-and-flip property can make or break your ability to quickly snap up bargains. As a licensed agent, not only can you have instant access to the MLS, you also can enter and inspect listed properties and submit offers to sellers yourself— which can put you far ahead of your fix-and-flip competitors.
Along these lines, you will never wait for an agent to run comps on a potential property or produce a market report -- these are activities you can quickly do yourself.
In fix-and-flip investing, time is of the essence. Successful investors will be those who are able to get their offer into the seller’s hands as quickly as possible.
There are countless legal intricacies involved in buying and selling real estate that can lead to trouble for the uninformed. Knowing the legalities involved in buying and selling real estate gives you the ability to draw up and submit contracts yourself, and will help you avoid legal pitfalls. There are specific state and federal laws regarding language you can use when negotiating and advertising real estate transactions, which you will learn in detail during the education and licensing process.
Licensed agents must also learn about real estate ethics. If you become a licensed Realtor -- with a capital R -- that designation indicates you belong to the National Association of Realtors (NAR) and have agreed to adhere to NAR's strict code of ethics, which can be a benefit to you as you build your fix-and-flip company's brand and reputation.
As a licensed real estate agent, you will have the option to collect a buyer's agent commission at purchase, and you will also save the commission you would have paid to a listing agent to list your renovated property. Depending on the sale price of your fix-and-flip project, this can add up to tens of thousands of dollars on just one deal.
Another way being you own real estate agent can be beneficial is the ability to forego the commission altogether on a property purchase, and offer to let the listing agent collect it, which can help to solidify relationships and expand your network for future business transactions.
As a licensed real estate agent, you will be able to increase your opportunities to network with other industry professionals, which can mean access to more off-market deals.
Also, in situations where you are networking with wholesalers and other property owners, you may find them more eager to bring deals your way if they are looking for a quick sale with an experienced, knowledgeable buyer who can expedite the documentation and closing process.
What are the possible downsides of becoming a licensed real estate agent?
The education and licensing costs can add up. Obtaining and maintaining your real estate license and paying for your MLS subscription can cost between $1k to 2k per year.
If your business centers on direct marketing to distressed sellers, as a licensed agent you will need to be more cautious about what you tell a prospect their home is worth. Also, you will be held to a different standard as an agent and you must also disclose your status as a licensed salesperson.
If you are seeking guidance on your journey to fix-and-flip investing success, we encourage you to contact the experts at Anchor Loans. We’re here to answer your questions, and we look forward to hearing from you.