The Science of Flipping - What Makes MORE MONEY? Realtor vs Real Estate Investor

Episode Date: November 7, 2022

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yo yo what is up everybody welcome back to the science of flipping I am your host Justin Kolbe I get this one question a lot from my students should I get my real estate license so I'm gonna answer this in multiple ways and I want you to stick around for the entire thing because I think you're not gonna expect I give. Now, if you are listening to this on Apple's, iTunes, Spotify, or some audio way of listening to this, make sure you give me a five-star review. I would greatly appreciate it. Now, to the point of whether you should get your license or not, let me reframe what I think the question really is. Should I work as a licensed realtor or just as an investor? So when you take that question into hand,

whether you should work as a licensed realtor or an investor, then I'm always gonna say work as an investor. However, that is not my final answer. In the generic question of should I get my realtor's license, my answer is usually just yes. And the reason being is I believe in general there are more upsides to getting your license than downsides yes you have to work by a code of ethics but the reality is if you just do the right thing all the time that's essentially the right code of ethics anyways so you're not

really in jeopardy of having to listen to the man, if you will. Yes, real estate investors can play a little bit more loose and fast than a realtor, so to speak, but the reality, again, is do the right thing and it just isn't an issue. So in the generic way of whether someone should get their license as a wholesaler or a flipper and potentially get their license sure i believe there's more upside now what is that upside well first and foremost you can get referred listings or buyers now this brings me to the point of what the real question is which is going to be do you want to work as a realtor or not okay remember that question so now you can get those referrals. Most importantly, if you're doing a lot of direct-to-homeowner marketing like I am, you can take an opportunity that may not work as an investment

because they may want too much money, and you can essentially list it and still get revenue or profit from that deal. That is probably and largely the most important reason I would tell any investor to get their license Again, if you are an investor, it doesn't hurt you to actually get your license. It can only help you you can refer out Listings you can refer out buyers You can create an income stream if you're a part of exp or Keller Williams where you can create a team There's more ways to create revenue by simply just having it. But this

is why I say I believe the real question really is, should I be a realtor or just an investor? That actually is going to change how I answer this question. You see, for those that don't know, I actually started as a realtor way back in 2005 and 2006. It was awesome because the market was awesome. In fact, I was selling new home builds and I didn't actually even do anything. Quite literally, I sat behind a desk, received offers, we chose the highest one, and I made a big commission. That was awesome, but I gained no skill in that time. So when the rubber met the road and the market started to crash, I didn't have a book of business and I had to go hustle. Now the hustle that it takes to be a realtor versus the hustler that it takes to be

an investor, that is where I divide the line. That is where I personally would never intentionally go get my realtor license again, ever. The reason being is I can surround myself with people on my team that are licensed, that can essentially do the same things that I'm looking to do, such as potentially refer the listing out or list a property from my team and then split a commission with my team member, et cetera, that I personally don't have to actually go work as a realtor. You see, when you work as a realtor, you're you work as a realtor you're really working for someone else that's where the rubber meets the road you if you're working for

a buyer you're driving them around you're showing them properties and by the way they may never actually buy a home they may say not till next year or the year after and you just spent four or five weekends driving them around God's green as earth. I have no interest in doing that. I actually would have interest in driving myself around looking for damaged homes, ugly homes, trying to find a property that I can invest in whether I wholesale flip, buy and hold and actually make more money because I'm doing it for me in my business.

You see, when a realtor, if you're a realtor, you're really based in the service industry of someone else. You're listing a property or you're showing properties to buyers. That is built on someone else. As an investor, you're doing it for yourself. And that is the distinction that I really want everyone to make.

If you're a real estate investor, if you're a wholesaler, if you're a flipper, should you get a license? Sure, why not? It actually would just help you more so than hurt you. Do you have to get a license? My answer is no. But if you are really contemplating whether you should have a license because you are likely going to be listing homes or creating revenue working as a realtor, then that is a very subjective answer. I can't necessarily guide that. All I can help you guide is understanding the pros and cons to doing so. The con is so big for me, I would never go get my realtor license again. I have no interest in working for someone else. And that is exactly what you're doing when you are listing a property or driving buyers around to find a property so as things go I would say all investors should to some extent have their realtor

license whether you the owner does or a manager on your team or at least someone on your team does I do believe it is really really important as things are happening with wholesaling being illegal it only is gonna help protect you right that's where I kind of draw the line is it only protect you as this nonsense is continuing the fact that I buyers and hedge funds are now buying and largely through Realtors it only creates more opportunity for you so I would tell you go get your license or have a manager or someone on your team get their license or have a manager or someone on your team get their license to help you work the business but subjectively if you're asking

whether you want to work as a realtor or you want to work as an investor i would always argue work as an investor there's more money in it you're working for yourself all the fruits of the labor come directly to you and you get to be your own boss that is my answer alright guys if you have not yet gotten your website at many pages calm go check out minute pages calm the key to that is you can actually update your website in minutes you yourself as a real estate investor it's not my strong suit but they make it easy for you so go to minute pages calm and get your website.

With that said, guys, that is all I have for this episode. I will see you on the next episode. Peace.