As a MF investor, does it make sense for me to go get a license?
So I have been ramping up my acquisitions and have my 4th close of the year tomorrow. Total purchase price of around $11m counting the $3m tomorrow.

3 of the deals the seller was also the agent but took no commission. The other one was a private deal owner to owner with no agent.


With the recent downturn a lot of family and family friends have pulled their cash from the market and want to get into MF real estate as well so I plan on buying another 20-25m worth of buildings this year especially with the dirt cheap rates we're getting.

They are all accredited investors so I can do a mini syndications on each deal so I'm wondering if it makes sense for me to go get my realtors license?

Anyone here have a license but mainly use it for their own acquisitions? My state recently passed a law that requires a license if you are a landlord to more than 10 SFHs, I don't dabble with that so I'm not being forced to, but if  I figure if I'm going to be doing even just 20m of acquisitions, being the buy-side agent is at least $400k in my pocket on top of syndication fees and AUM fees...
[{"id": "fkd9v0g", "text": "Get your license. It will help you find more deals (meeting buyers and sellers) and could put some extra commission cash in your pocket. You seem plenty knowledgeable in the industry to pull this off \ud83d\udc4d\ud83c\udffc", "replies": [{"id": "fkdccu3", "text": "I don't think I ever want to be in the sales aspect unless it's in a very lax position such as selling one of my own buildings or a good friend's building. \n\nI was in wealth management and sales is not something I want to get into. if someone comes to me and asks to list then sure, but I am not going to spend my time cold-calling for leads on sales and I would rather just focus on building out my portfolio and increasing NOI.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fkd9xy0", "text": "I do. And I will say when i find a pocket listing. I let the agent double end the deal if its competitive. This has helped me close several deals.\n\nIt might be worth it for the tax benefits. If you're not claiming RE professional now, with the license it will be easier to make that arguement.", "replies": [{"id": "fkdc93y", "text": "One of my deals was actually being sold by a agent + investor. I let the agent double end it and I came in with more aggressive closing terms and was able to secure the deal for $50k lower than asking when I know they had offers above ask as well.\n\n\nMajority of my income is from cashflow and I limit my cashflow to the deprecation of the property so my effective tax rate is close to 10% while collecting 20k/mo. \n\nI think grabbing the license will allow me to go up to 30k/mo while still minimizing my taxes.\n\nSo even with your license, you still sometimes will let the agent double end it in order to push you as the buyer thru?", "replies": [{"id": "fkehh5g", "text": "So even with your license, you still sometimes will let the agent double end it in order to push you as the buyer thru?\n\nYes. My assumption is that the deal will net me more income than the commission. If not why would i be buying the deal? Then from there the most important thing is getting the deal. So I start by making sure the agent gets paid. Especially in the real estate market that we have had in the past 5 years. The last property I purchased was a 5 unit in Pasadena, CA. The property had 13 other offers. But we were able to close all cash in 20 days and let the listing agent rep both sides. \n\nIn situations where the seller has specifically stated that they will not allow the listing agent to rep both. I have repped myself.  So far(small sample size) I have not closed any of those deals.", "replies": [], "depth": 3}, {"id": "fklxjim", "text": "&gt;Majority of my income is from cashflow and I limit my cashflow to the deprecation of the property so my effective tax rate is close to 10% while collecting 20k/mo. \n\nThis sounds very interesting, could you extrapolate in laymens terms?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fkdf00y", "text": "It really doesn\u2019t take much time and most states it\u2019s only about $500, if there\u2019s even a slim chance you could pocket one acquisition fee then it\u2019s worth it. I think you need to find a brokerage to \u201chouse\u201d your license which might be some hoops to jump through though", "replies": [{"id": "fkmfqwd", "text": "I think finding a principal to house the license might not be a problem. I've done the same when I was in WM and I know a few brokerages in the area that would be open to it.\n\nLike you said, if I repped even a single deal not my own, the average transaction price in the midwest in the properties I'm comfortable with is $2-$5m. So that's $100k easily on the deal.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fke09b2", "text": "I don't see it as necessary. With that type of deal volume you could hire someone with a license to handle acquisitions.", "replies": [], "depth": 1}, {"id": "fke1456", "text": "Not worth it if you\u2019re on the buy side.  Acquisition fees are standard on the buy side.  Just charge the deal a 1% acquisition fee and move on.", "replies": [{"id": "fkmfuot", "text": "I do charge a 1% acquisition fee but some deals I do solo so can't really charge my own acquistion fee. By having the license, I can take more cash out of the buildings and not spend so much capex and flatten the curve a bit.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fkeaipe", "text": "Yes you should get your license and run a cost seg analysis on your properties and use the accelerated depreciation to offset all your income, passive and otherwise. CBRE has a great cost seg team! \n\nBackground: I work with MF investors all day every day. This method is quite common of professional investors from what I've experienced.", "replies": [{"id": "fkmfsob", "text": "I've heard good things about CBRE. Any experience with them?", "replies": [{"id": "fkmg9xn", "text": "I've met with on of their cost seg people a few times. He came a spoke to my principal broker along with myself and another commercial broker. He also attends our CCIM chapter events. He's a great guy and super smart. Whenever I have clients looking for cost seg he's my referral. No experience with the company outside of him to speak on.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fkeel7u", "text": "Not worth your time on the bu my side. Waste of time and money, plus in most states you\u2019ll get a salesperson license not broker so you can\u2019t really use it unless you work for a broker and meet the requirements for it. \n\nAlso most states have an exemption for owners that won\u2019t require them to have a broker to rent apartments. And if you\u2019re looking for a commission on the buy you don\u2019t need the license you can just say it\u2019s an acquisiton fee or something and put it on the settlement statement.", "replies": [], "depth": 1}, {"id": "fkem5i2", "text": "Based on your purchases this year at $11m, you could have saved $75k-$300k on them by having a license by either referring yourself or knocking the commission off (depending on the brokerage). Generally, after a couple years or certain number of transactions you can get your principal broker license and open your own shop. \n\nMLS access will likely let you see more data and you can run a small team with your savings to not have to worry about the paperwork", "replies": [], "depth": 1}, {"id": "fkenoz1", "text": "As a broker in a highly competitive market, you will never win a deal if you start asking for a fee - literally never.  Only way a license would be worth it is if you were convinced you could find deals off-market more than the other brokers in town - again, would never happen in my market personally but you would know better.", "replies": [], "depth": 1}, {"id": "fkerix5", "text": "Kind of a crazy question for someone at your level... Have you had a buyer's agent represent you on all of your deals?  Or are you dealing with the listing agent directly, so that you're more competitive and the Listing Agent (who has a lot more influence than in residential) wants to work with you?\n\nIf you're landing deals with a buyer's agent, then yes, get the license and do it yourself.  But my experience is that most Listing Agent's will steer their sellers away from buyer's with agents, so they can keep all of the commission.  Both consciously and unconsciously", "replies": [], "depth": 1}, {"id": "fkhmwse", "text": "Just remember.. your broker is your best friend. If you\u2019re planning to get your license just to take commission on your own deals I would advise not to. If it\u2019s for tax reasons- sure why not.\n\nKeep your brokers happy, pay them, and let them know they are appreciated. A broker working for a double commission is going to work 10x harder for you. (I\u2019m not a broker btw)", "replies": [], "depth": 1}, {"id": "fkiy2hx", "text": "I'm new to real estate. But, I'm currently working with a company as an appointment setter. My day to day is cold calling homeowners to find out if they're interested in selling or buying a property. I was wondering what an MF Investor is.", "replies": [], "depth": 1}, {"id": "fkmfkdh", "text": "Just thought I would post an update. Thought it over and I think I'm going to pursue my license once the entire country calms down a bit. In the meanwhile, I plan on refinancing most of loans since I can cut at least 75-95 basis points maybe even 1-1.1% on some of them.", "replies": [], "depth": 1}]