Re:Ask HN: What is your passive income 2019?
by davismwfl on Tuesday October 29, 2019 @07:12PM
(#21393071)
Yea, to add one major point to that list, a real estate agent most states require you to house your license with a broker. And you cannot become a broker in most states until you have usually some period of time working for a broker. In my state you need 2 years under a licensed broker before you can apply to be a broker (there are some other things you can do to qualify too but it is still a lot of time). So in the end that means, you get your agent license (pretty easy <$1000 generally), work as an active agent in some fashion for 2 years before you can get your broker license and then, finally, you can eliminate 50% of the transaction fee.
The math just doesn't work out, if you get to the point you are doing that many deals, just hire a broker for your business.
Getting access to the MLS isn't that hard. And finding a good agent/broker to work with is very doable as they want to work with investors since it is a source of recurring income usually for them.
That all said, I am always interested in other peoples approach to minimize transaction fees, but most investors I know in real estate use this approach as it just works and minimizes liability.
1. 135 hours is a LOT of time to invest for even tens of thousands of dollars return. I could build and market a side project or two in that time, which could have potential for significantly higher return.
2. To recoup that return, I have to take a big risk, using a highly inexperienced agent (me) in a huge dollar transaction where everyone I speak with will have much more experience.
3. Worst decisioning -- if I am my own agent, I'm not in a good environment for optimal decision making.
There are other reasons outside the scope of your question (some people prefer lower touch investments), but those are a few.