Should You Extend Your Investing to Out of Area Markets?

August 9, 2017

As foreclosures have been declining with the improving housing market, it is getting more difficult to find good rental property
Dean Graziosi

How Detailed Should You Write Those Fix & Flip Contract Specifications?

August 7, 2017

On a major investment website, there is an article about the top 5 mistakes fix & flip investors make that create failed
Dean Graziosi

How Detailed Should You Write Those Fix & Flip Contract Specifications?

August 5, 2017

On a major investment website, there is an article about the top 5 mistakes fix & flip investors make that create failed
Dean Graziosi

Should You Get a Real Estate License to Invest?

February 27, 2017

An early question many people have if they’re getting serious about actively investing in real estate is whether to get a real estate license or not. After all, if you’re out there buying and selling homes, it can be great to save the commissions and increase your income on every deal. Especially with fix and flip, there can be some decent savings if you can avoid using real estate agent commissions.
Dean Graziosi

Should You Worry About a Housing Price Bubble?

February 5, 2017

Today’s market is very different. The rising prices today are caused by a fundamental economic supply and demand imbalance. There are simply far more buyers than sellers in the current market, and this is creating competitive buying and higher prices.
Dean Graziosi

The Quick Search You Should Do in Your Rental Property Due Diligence

January 9, 2017

Dean Graziosi

Should You Get a Real Estate License to Invest?

November 5, 2016

An early question many people have if they’re getting serious about actively investing in real estate is whether to get a real estate license or not. After all, if you’re out there buying and selling homes, it can be great to save the commissions and increase your income on every deal. Especially with fix and flip, there can be some decent savings if you can avoid using real estate agent commissions.
Dean Graziosi

Should You Worry About a Housing Price Bubble?

August 14, 2016

Dean Graziosi

Should You Worry About a Housing Price Bubble?

April 8, 2016
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The Case-Shiller Home Price Index reported that home prices rose on average 5.7 percent in January from January the year before. That was pretty much as expected, but there was also a statement in the report that could raise alarms in some circles: “Home prices are rising very rapidly — twice the rate of inflation. There is very, very little supply.”

Could we be seeing a housing price bubble building similar to the one that burst in 2006 and took down the market? In one word, the answer is “No.” There is very little similarity in today’s housing market and the pre-bust market in 2006. Other than rising prices, other factors are very different.

Most analysts agree that a major factor in the crash that began in 2006 was lax lending standards and numerous programs spurring careless home buying and speculative flipping. People were in a frenzy to buy houses back then, and prices showed it. When the bubble burst, it was a nasty situation that lasted for years.

Today’s market is very different. The rising prices today are caused by a fundamental economic supply and demand imbalance. There are simply far more buyers than sellers in the current market, and this is creating competitive buying and higher prices.

Another major difference is the financial market and home loan requirements. It’s much more difficult these days to get a loan, with the old “stated income” and “no income verification” loans nowhere to be found. This keeps the careless buyers out of the market and isn’t contributing to price increases.

So, what can we expect if it’s not going to be a big bubble burst? With fewer artificial influences on home price action, the market will take care of itself. There are still a great many would-be sellers who are waiting to list to get back equity they lost in the crash, or just to maximize their equity and sell when they meet their cash goals.

A large group holding onto their homes is the baby boomer generation. Some housing analysts are blaming some of the supply problems on boomers sitting on their homes and not selling at anywhere near the rate they sold in the past. Part of this is because they’re not wanting to buy a replacement home in this market, or they don’t want to pay high rents. Rents have been rising faster than home prices, and it’s not the best time to be checking out retirement rental properties.

The market will take care of itself, and when prices hit points that spur sellers to list their homes, the supply will increase quickly. I don’t think demand will rise nearly as quickly when this happens, and there will be a slowing of price increases, and possibly even reversals in some areas. Will some recent buyers get hurt? It’s possible, especially if they paid up for a home in a bidding war. However, the overall market will be healthier.

To learn more about how YOU can profit from real estate in 30 days or less CLICK HERE to get a copy of Dean’s best-selling book “30 Days To Real Estate Cash”!
Dean Graziosi

Should You Get a Real Estate License to Invest?

November 24, 2015
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An early question many people have if they’re getting serious about actively investing in real estate is whether to get a real estate license or not. After all, if you’re out there buying and selling homes, it can be great to save the commissions and increase your income on every deal. Especially with fix and flip, there can be some decent savings if you can avoid using real estate agent commissions.

Many Deals Avoid Agents Anyway

If you’re marketing to attract distressed sellers, or if you’re using a lease-purchase strategy, you’re usually dealing directly with the seller anyway, so there is no real estate agent involved. If you’re flipping to another investor, the same thing applies. If you’re buying and fixing to hold for rental property, you may end up with commissions if it’s a listed foreclosure, but they’re generally lower because the lender selling the home negotiated it that way.

So, unless you’re doing a lot of deals with real estate agents involved on one or both ends, you’re generally not going to see a major savings or income boost if you get your license. An exception could be if you are using an investor or investor group and guaranteeing them a specific return on deals. If you are, and your commission as the agent is a valid cost in the deal, it could be extra income for you.

There’s Time and Money in Maintaining a License

Real estate laws vary by state. But, in almost every state, the licensing laws require upfront license fees and periodic renewals, often in the hundreds of dollars. You’ll have local MLS, Multiple Listing Service, dues to access the listings. Many of these associations require membership in the National Association of Realtors, another annual fee. One broker added up just the licensing and MLS fees and found that his costs were around $ 1,500 per year.

Many states also require bonding and or insurance to practice. The same broker had an annual premium of around $ 350 for required insurance, and it couldn’t be shopped much, as the state mandated that only companies were to be used. Now, if you aren’t doing any active real estate other than for yourself, that’s probably all you’ll have out of pocket. However, in most states you must work under the supervision of a broker, and they will not want to take on a part-timer without some compensation. This can be a percentage of each commission or monthly desk fees.

Now let’s talk about the annual Continuing Education requirements. These vary, but usually require around 30 mandatory renewal hours in classes mandated by the state. So, you have the costs for those as well. These may be annual or for a two or three-year license period. So, just to maintain an active real estate license, you will have significant out-of-pocket costs.

Liability

In most states you can do your own deals and not be forced to hire a real estate agent. You’re considered to be in charge of your affairs and the risk is yours. However, once you have that license, things change. Your dealings with that seller and buyer will be considered as giving you an advantage with your license training. You pick up some liability in the transaction if anything goes wrong. You are subject to complaints with the state and even lawsuits in extreme cases.

Well, I’m done selling you on getting a license! Actually, in some cases it can be an advantage, but in the majority of investor deals, even fix and flip, it’s usually not going to yield enough to be worth the added cost, invested time and risk.
Dean Graziosi