By Mike Baird
Being a real estate investor means wearing a lot of hats. When you make your living flipping houses, in a single day you can act as an investor and homebuyer, a project manager, a day laborer, a marketer, and a real estate agent.
If you want to build and grow your business, you definitely can’t do everything yourself. Even if you’re only working on a single property at a time, there are some projects that you should leave to the professionals. Real estate investment is all about networking and building relationships. In the long run, you can save a lot of time and effort—and get a lot more done—by building your team instead of trying to take everything on yourself.
You should definitely have working relationships with contractors, wholesalers, and other people in the real estate business, but should one of those people be a real estate agent? If you talk to house flippers, you’ll get a lot of differing opinions about this. Some say that it’s not worth the time, energy, and money involved in becoming a licensed real estate agent. Others will tell you that, over the long term, you’ll save money by not paying a commission on each sale.
Now, if you’ve seen any episodes of Flip Men on Spike TV, you know that I’m a licensed real estate agent, so I don’t use anyone else to sell my flip houses. But, if you don’t have much experience with real estate, you might benefit from having an experienced professional in your corner. Let’s look at some of the pros and cons of working with an agent or becoming a realtor yourself.
Pro – Save Time and Effort on Paperwork
Do you do your own taxes? For most people, it’s more than worth $300 for an accountant to take care of all of their deductions and fees. Hiring a real estate agent is similar. A professional real estate agent isn’t going to miss any details or make any novice errors with the paperwork for your sales. While he or she does all of your paperwork for you, you can focus on finding new deals and rehabbing other properties to keep your income flowing.
Con – The Commission
Of course, you’re going to have to factor your realtor’s commission into every sale you make. In most deals, you’ll already be paying closing costs, and a real estate agent’s commission can cut even farther into your margin. I’ve had some really close deals before, and that commission would have been a pretty big hit.
For this reason, it definitely pays to get your realtor’s license. The process to get licensed is also really informative and educational, and you can learn a lot about flipping houses as you go.
Pro – Get Better Deals on Sales Now
Of course, while you’re learning, there’s nothing wrong with hiring a professional to help you out until you get there. An experienced real estate agent can also help you get better prices on your sales, which is really good news for new flippers. If your realtor shows your house to the right people and gets a great price for it, they can more than pay for their commission.
Ultimately, whether or not you use a real estate agent to sell your properties is up to you. If you want to focus on the other aspects of flipping houses and leave the sales to a professional, you can build your business and get more deals going while your realtor sells properties for you. If you want to learn how to sell houses, you won’t have to hire a real estate agent for much longer.