In this episode, I’m diving into one of the questions I get asked all the time: Do you really need a real estate license to flip houses? I’m sharing why I didn’t get mine in the beginning, what finally convinced me to take the plunge, and how having a license has helped (and when it really doesn’t matter). Whether you’re just getting started or wondering if it’s worth the extra effort, I’m breaking down the pros, the cons, and the real talk from behind the scenes.
Today, I’m talking about something that completely changed how I do business. And it’s something that I didn’t do for the first five years that I was flipping, and it was getting my real estate license.
Do You Really Need a Real Estate License to Flip?
And so this is one of the questions I get quite often from people who are, you know, thinking about flipping, or maybe they have already started and they’re like, you know, do I really need to get my license? Like, is that something that you think is beneficial for me? And so because it depends on people’s individual circumstances, of course it depends.
But the reason I didn’t get my license at first was because I first and foremost had no experience in real estate. So because I had no experience in real estate, even if I had had my license, that wouldn’t have made up for the fact that I had no experience. So I knew my success and my ability to learn was really, really, really important.
And so I wanted to be surrounded by people who had knowledge and experience. So that’s why I wanted to work with realtors. I wanted to learn from them, and I wanted to talk to a multitude of realtors and figure out who had the type of experience and knowledge and information that was helpful for me in my business.
The Difference Between Being Licensed and Being Experienced
I see it all the time where a brand new agent flips a house and it doesn’t go well, and that’s because there is no correlation between being licensed and actually having knowledge to flip or about the market that you are potentially flipping in. So there’s a big disconnect there for people. And so I always want to caution people, even if you are a new agent, if you have never flip, if you are a new agent and you have never flipped before, have another agent advise you.
Ask another agent questions. Have them look at numbers for you. Ask them to look at things through a different lens and give you input, because that can change everything in terms of your success. From a flipping standpoint, I have seen people with new licenses buy properties and renovate them and make all different types of renovations, or do a limited amount of renovations, and that property sits on the market untouched, with price reduction after price reduction after price reduction.
I have seen people flip houses who are brand new and that property is priced so astronomically high that it doesn’t sell and they end up converting it to a rental, which is a key indicator that they probably overspent either when they bought it or on their renovation, or on both. So I see that a lot. So make sure that when you are starting out flipping, especially if you have no experience, you rely on agents who do have experience.
Why I Didn’t Get Licensed at First
So I didn’t think that I needed a license for that reason, that I didn’t have any knowledge to begin with. And so having a license wasn’t going to help me. The only thing that having a license does when you don’t have experience is it gives you access to properties and data on the MLS that you wouldn’t have otherwise.
But if you don’t know what you’re looking at and you don’t know how to analyze properties, then it’s not that helpful to have that access either. So over time, I did start to see some opportunities where I was like, you know what? Maybe this would make sense for me. The other thing is, when I was getting started, I was working a full time career that had a lot of professional licenses and registrations around it, and so I didn’t want to take any more tests.
When I Finally Decided to Get Licensed
I didn’t feel like it was necessary for me to go through that process to get that license, especially when I was doing it on a pretty limited basis. I was only doing, you know, a few transactions a year. It wasn’t significant price point. So commission that I was paying, I was really happy to pay that to my agent, who was really helpful in securing properties for me and advising me on budget and renovations and what I should and shouldn’t be doing, and then also making really good recommendations for listing price when the property was purchased.
So when I decided that I was going to potentially move into flipping full time was probably about year four of my business. And so that’s kind of when that idea started to come to me and I thought to myself, If I’m going to leave my job, then I also want to have some additional income that looks from a lending perspective or from a qualification standpoint, maybe a little bit more consistent and stable rather than flipping.
The Perks of Having a License
So that’s when I decided to get my license, because I wasn’t going to have the W-2 income anymore for my corporate career. But getting a license also gave me a few other areas of opportunity, and so that made sense for me too. So it gave me access to be able to run any type of data comps, look at tax records, look at property transaction history, look at neighborhood activity.
I could look at those any time and have the most accurate information possible. It also gave me the ability to go ahead and look at properties as soon as they came on the market. I didn’t have to wait to have somebody schedule a showing for me. I didn’t even have to wait for somebody to run comps to see if I thought that the property was going to be something I wanted to look at, so I could do that immediately.
It actually also gave me the ability to submit offers pretty quickly and have conversations with agents. So the thing about conversations with agents is that when you reach out to them and they answer the phone, there are oftentimes things that you can find out about strengthening an offer or about a seller situation that can help position you better to secure that property, especially if there could potentially be multiple offers.
Think of it this way: if you are an agent and you reach out to a seller and you say, hey, if there’s an offer that comes in in the next 30 minutes, will you be presenting that to your client, or will you be waiting a couple of days until you know other people have a chance to walk through the property—that insight is really valuable.
If you have a conversation with a seller and you say, hey, is there anything in particular that the seller is looking for in terms of an offer, or are they looking for a specific closing date, or are they looking for the opportunity to leave any personal belongings behind so they don’t have to worry about having another company come in and take those items out?
Are they worried about maybe some things that are required to be addressed by the city, like small repairs? Those are the types of conversations that are game-changers.
And then I also believe that when you have the opportunity to list properties and negotiate, also when you’re writing offers on property, that negotiation strategy is something that is really valuable too. And it is something that when you have your real estate license now, you’re not only able to do that with your own business, but you’re able to do that for other people.
Because I do have other clients that I work with who are investors. I also have traditional clients that I’ve worked with. That experience allows me to be a better negotiator in terms of representing my other clients as well.
So, Do You Really Need a License?
So there is something about that that gives you just a different insight as well. And then the question that often comes up for people too is what do I really need a license to flip? And the answer is absolutely not. And I know many people who are solely focused on the flipping part, and they don’t want anything to do with the agent part of it.
So they’re happy with somebody that they have found that they’re working with. They’re doing a great job for them, and there are no concerns that they have. They feel like they’re able to get what they need in an appropriate time frame. They feel like they’re able to take advantage of opportunities with offers. They feel like that agent is a good representation for them in terms of negotiation.
What Happens When Your Agent Isn’t a Great Fit
And so if you don’t get licensed, that’s fine too. You just have to make sure that you have that person in your agent who is able to do all of those things for you. And there are so many amazing agents who can actually do that. Now. It has come up in some of the monthly mastermind meetings over the course of the last couple of months, that there are some people that are investors who are working with agents who maybe are not the best fit.
So a couple of examples. There’s like one of the members has an agent who, she wanted to write an offer on a property and her agent said, ooh, that listing agent is really difficult to work with. And if it’s not a full price offer, they’re not even going to present it to their client. So I would say, let’s pass on that.
And that’s where you come into this area where it’s very, very, very—that’s not okay. If that agent is representing you and you’re wanting to write an offer, even if it’s below list, your agent can certainly advise you. However, if you want to do that, they should be writing that offer for you. And for that listing agent who the agent said, oh, they’re not even going to present it—that’s actually not a decision that agent gets to make.
That agent’s responsibility is to present any offers that are received. It’s the client’s decision whether or not they accept it. Again, their agent can make recommendations, but it’s not the agent’s decision whether or not to present that to their client.
A Real-Life Win
Another situation that came up was we had someone who was discussing pricing for their property, and they mentioned that their agent was thinking that they wanted them, was advising them to list really on the high side, like higher than they were comfortable with. And then after two days, if they didn’t have an offer, then start doing $10,000 price reductions every 2 to 3 days.
And that is a strategy that I have not necessarily ever heard of. And it didn’t feel right for the member who was bringing this to the conversation. But the challenge is when someone is encouraging you to overprice and it’s uncomfortable for you, there’s a reason it’s uncomfortable for you—because you don’t believe it’s the right thing to do.
So we walked through the comparable sales, came to a number that was comfortable for this person, and that’s what they decided to move forward with. So they actually told the agent where they wanted to list. And then sure enough, within just about 12 hours, they actually had an offer come in that was $15,000 above list.
So because the market will always let you know if you are priced appropriately, and if there’s enough interest to move that price higher, then the market will do that all on its own.
It was an interesting lesson in conversation that we had about that because again, oftentimes—and this is somebody who has flipped just a handful of houses—we look to the agent for their expertise and their knowledge. But that doesn’t necessarily mean that there’s not going to be times when you maybe need to ask a few more questions or get some more clarification, or be very firm in what you believe or how you need them to support you. Because this is your business and so no one is going to look out for your interest better than you.
Final Thoughts
So I hope this episode, even though it was short, is helpful in terms of where you might be on the journey to getting your real estate license, or maybe this confirmed for you that it’s something that you do not need because you have a rockstar agent that’s already working on your behalf, and you’re comfortable with that and you’re experiencing that success.
So if you are looking for any additional information about house flipping, make sure you check out the show notes and download the most recent freebie: the Top Ten Tips for High Profit Flips. There are tips that you can use on your search this next weekend, or even as you’re scrolling tonight, to find properties that are going to have the most flip potential.
Thank you so much for listening to this episode. And until next week, bye for now.
