Many people are surprised to learn that there is no requirement for a house flipper to have a real estate license. It is purely optional. Nevertheless, possessing a real estate license carries many benefits and can be quite helpful in ultimately selling the property sooner rather than later. Some of the specific benefits for house flippers who obtain a real estate license include:
Access to the Multiple Listing Service (“MLS”)
Only licensed real estate agents are provided unrestricted access to the MLS. If you are unaware, the MLS isan online platform where real property is listed for sale. Properties that are available on the MLS are viewable by the public. However, only a licensed real estate agent can add a property to this database. In addition, websites like Realtor.com and Zillow that make data from the MLS public do not have access to as much information as a licensed realtor. Furthermore, access to newly listed properties is often delayed.
If you have a real estate license, you possess the ability to list properties for sale on your own without seeking help from a real estate agent. You will also have full access to information about other properties listed on the MLS, making it easier for you to find the prospective purchases that are most likely to work for you. Furthermore, you will be able to access all newly listed properties as soon as they hit the market, giving you an advantage over any house flipper that doesn’t have a real estate license. Since many of these properties are under contract within a few hours of being posted, this is an invaluable benefit for someone flipping houses.
Alternate Sources of Income
Flipping homes is not a “steady” job where you clock in and out and work a traditional 9-to-5 schedule. It is a high-risk, high-reward profession and comes with inherent challenges, especially in the beginning. One of the biggest challenges is that home flippers typically do not have a steady flow of income. Instead, they generate income once the home is flipped and sold.Some people, but not all,will eventually be able to earn their income by flipping houses full-time. However, for many, they may need to take a side job to ensure some income is flowing through the door to pay necessary expenses. House flippers with a real estate license can supplement their income by working as a real estate agent and earning commission. House flippers can also add to their income by accepting positions in property management.
Reduced Closing Expenses
If you lack a real estate license, you will probably need the help of a real estate agent when you are ready to put one of your investments back on the market. When the real estate agent sells the property, you will be required to pay a sizable commission. Even if you have a real estate license, you will still need to pay commission to the buyer’s agent. However, your overall closing costs will be lower than average.
Ability to Network and Generating Leads
The more connections you have in the local real estate industry, the more successful your house flipping business will be in the long run. Once you have a real estate license, there is a greater chance that you will meet other real estate agents, as well as wholesalers, home inspectors, appraisers, contractors, California hard money lenders and investors. This will help you to build a stronger, more sustainable, and successful flipping business.
Take Action Today to Secure a Hard Money Loan in Los Angeles
If you are a home flipper, regardless of whether you have a real estate license or not, you probably need assistance securing the necessary capital to purchase a property that is ready to be flipped. PB Financial Group is a premier direct hard money, private money, and bridge lender, who has been providing quick funding since 2006 and have funded over 2700 hard money/private money loans. Our objective is to work to satisfy your financing needs on important real estate projects throughout California in an efficient and effective manner.
PB Financial NMLS #357614/DRE #01522495