On the show today we talk about… Should you get your real estate license?
Notes from the show
The Vantastic Life is…
– in Alpine Texas and Big Bend National Park
We are talking about a weird topic today.
Interest rates are nice and low
Saturday, March 9th at 10am to 3pm is our quarterly event with Attorney Jeff Watson to talk about how to invest tax free with self directed IRA investing.
This will be more detailed and have a different twist than traditional trust companies that give these talks.
Jeff is also the national authority on legal wholesaling, and we’ll also be talking about that.
You can find out more about Jeff at WatsonInvested.com.
This will be a GREAT event that you should attend.
One of the common themes is their tax stuff.
Knowledge is power!
We will providing you with lunch, and we highly recommend that you show up and get the info first hand.
Be there or be square!
Make sure you also checkout our weekly coaching on Tuesdays at the Brew Pub. Free for SIC members and 2 meeting free for non-SIC member from 12-2pm in Burien. All info on MeetUp.com
Let’s talk about another subject that keeps popping up… do you need a license or not?
You need only 90 hours of coursework.
We recommend Rockwell who might not be the cheapest but they have the highest pass rate.
The cost $429 at https://seattleinvestorsclub.com/Rockwell
So, not that expensive.
If you can’t spend less than a thousand dollars… then there’s probably other stuff going on.
Then you have to renew it…
* At first its after 1 year
* After the first year… it’s every other year.
* It’s a very simply online program
* You have to complete another 90 hours your first year.
* Then it’s 33 hours every other year after that.
That are a ton of continuing education that you can take, and they can carry forward to the renewal period.
The real cost actually comes in when you decide where you want to hang your license. These are translation fees and splits with your broker.
Even if you were 100% commission… you’ll still have a transaction fee when you close a deal.
Sometimes there are a number of other fees that you have to consider.
It’s all becoming less and less expensive where you and go to a firm and get a lot of training.
Slip is 20-50%
Julie… pays a 20% split but it caps at $15k, and she gets 100% after that. So, 15% per year plus transaction fees after that. Not a lot.
If you could make $10k would you be willing to pay 750-2000 to come out ahead?
To Julie it’s a no brainer! Having your license helps you to make more money.
Some people think they have to play by more rules if you have your license.
A wholesaler will say that they can make that $10k without paying those fees.
If you’re a wholesaler, you’re probably marketing for leads… and wholesaling opportunities are about 2-5% of the market. So there are WAY more opportunities to make money through traditional sources.
Unless you are a super ninja with a very targeted list that helps you find more motivated sellers. If you’re a super ninja call us to be on the podcast!
The majority of people are not going to find that many people to do a wholesale with.
You need to take advantage of every lead, and without having a real estate license it’s hard to do that.
And we want to sleep at night and do everything right.
Bottom line: if you’re spending money on marketing it makes sense to have a license.
If doesn’t mean that you have to act as a broker, you can refer your leads and get paid.
But referring your leads doesn’t usually work because the report doesn’t get made.
A commission or wholesale fee are taxed the same way, so it’s the same to Julie. And both of them can take the same amount of work.
Although people will say that wholesales are easier, they usually are about the same.
If you’re one of those people that has wholesalers bringing them deals constantly then you probably don’t need to get your license.
But we did just have a market correction here in Seattle, and we don’t know anyone that wasn’t effected by the market change.
Imagine if you could have listed your own deals to mitigate the down turn a little bit.
Most people think that it takes so much more time, but it’s a bit of a myth, and you don’t have to participate in a bunch of other things at the brokerage.
It’s like having a Costco card.
You say… hey Joe can I borrow your Costco card..? Why wouldn’t you just go get your own card..?
It’s also a bit of an insurance card. You can mitigate some of your costs.
Collecting referral fees, all that kind of stuff!
The truth is the mystery about the rules…
* I’m going to have to follow all of these rules
* I can’t wholesale
If you are a slimy realtor you will get what’s coming to you.
Julie actually thinks that your hands are tied if you’re a wholesaler without a license.
As a real estate agent you’re breaking MLS rules if you get into trouble.
But if you get accused of acting as a broker, but have no license.
Checkout the Jeff Watson podcast at https://seattleinvestorsclub.com/63, and come see us this weekend.
The rules are like this…
* You definitely have to tell your broker that you’re wholesaling. All brokers are not equal. Just because you have to tell them what you’re doing is not a bad thing.
* Feel free to talk with Julie in Burien on a Tuesday.
* You have to disclose to sellers that you have a license. And this can be an advantage.
* You have to disclose that you’re a broker in any type of marketing that you do. Again, no big deal. The key is really your follow up.
* You have you report all of your unlisted sales to the MLS. It’s not a big deal.
* Do you have to report your wholesales where you sell a contract and not a property. You need to discuss this with your managing broker.
* If you’re a member of the NWMLS you’re not allowed to pre market deals.
When you wholesale, remember that you aren’t supposed to be marketing that you have a house for sale. If you want to talk more shop with Julie about this… come do so!
The number 1 problem that people have is how they market the properties.
If you know the rules, they are all workable. It’s all about how you present yourself as an agent.
For the first 10 people that email Julie and say “I’m in” she will do a private class with you! Hot damn!
Let’s have lunch at Bongo’s with Matt Smith.