The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: Megma on November 21, 2014, 12:35:35 PM
-
Hi,
I'm considering buying my first rental property this upcoming year - unsure if I will buy more after that but have some green employees I want to put to work. I am thinking to first sit the RE License exam so I can represent myself and wondering if others have done this?
I'm in NC so required to take a course (cost $400, maybe less if I shop around, + post a few test required courses) before I can take the exam. I work full-time in another industry so don't think I will be working much, if at all handling transactions for other people.
I believe if I represent myself I'm entitled to the buyers commission, I would also get access to the MLS as an agent which would be nice.
Is anyone else doing this? What has your experience been? Have/can you you handle the occasional transaction for other people?
-
You can do this, however it then requires that you disclose the fact that you hold an RE license to a seller, when you are going to buy a property for your own use such as for a rental. You then need to make sure everything is very much above-board in your dealings, so there's no backlash (lawsuits) saying you took advantage of the seller due to (assumed) advanced knowledge.
You also will have to work a period of time under an actual BROKER, so you need to get that arranged, and to realize that broker actually makes all the legally binding decisions (since he'll be held accountable for them). He also gets (is entitled) a percentage of any commission. Say said commission on any particular property is a total of 7 percent. Well, the listing agent gets a cut, the brokerage gets a cut, the selling and buying agents get a cut, pretty soon it's not nearly as much as you might think...
I know investors that got their license, realized using it might not be in their best interests, and then held them in escrow instead.
-
You can also just buy the property without an agent involved, and without being an agent yourself. Most of the necessary forms are available online and you can hire a RE lawyer as well if you want help with anything complex.
-W
-
Actually in NC all of the forms are standard - you have to use the NC RE Commission's contract form for all transactions, so it would probably not be that hard to go without a broker.
-
You will want to check NC real estate law.
In Minnesota you must work under a broker for 3 years and after that can get your own broker license.
You could buy without a license but wouldn't be entitled to the buyer side commission.
Access to the MLS doesn't come with getting your license. Getting your license and paying MLS $500/year gets you access to MLS.
In addition to getting your license, paying for MLS and joining a brokerage you will need to do things like pay the local, state and national Realtor associations and pay for E&O insurance.
In other words, if you are doing this for just 1 deal it probably isn't worthwhile.
-
That is really helpful to know all of the additional fees I would have to pay. I need to consider if I only want to buy one property or turn real estate into a side job. You're right, it's probably not worth it for 1 deal only...