Becoming a Real Estate agent was one of the best decisions I ever made. Real Estate has provided me with a great income, a flexible schedule and incredible investment opportunities. There are many ways to make money as a Real Estate agent or a Realtor. I specialize in listing REO and HUD homes, but I also fix and flip houses, run a team with buyer and seller agents, complete broker price opinions (BPOs) and I buy long-term rentals. I am also planning to start a property management business and expand my retail sales team.
How I save money with a Real Estate license
One of the biggest advantages to being a Real Estate agent is the money I save on my investment properties. Even if you don’t consider the commissions I earn on selling houses for other people, I have saved at least $70,000 in the last year on properties I have personally bought or sold. The savings on commissions on my investment property is why I think it is vital that Real Estate investors also get their Real Estate license.
How hard is it to get your Real Estate license?
If you are thinking of getting your Real Estate license, you may be asking yourself “how hard is it to get a Real Estate license?” That is a difficult question to answer, because each state has different licensing laws and requirements. However, a good friend of mine just passed the Real Estate test in Colorado and I have some great information from him on what to expect when getting your Real Estate license in Colorado. This information may not be state specific for where you live, but it will give you an idea of what is involved. Some states have less requirements and some more requirements to get your Real Estate license than Colorado. I have had my license for over 11 years and it was not easy for me to get my license, things have become even more difficult over the years.
For more information on my long-term rental property strategy and how having a Real Estate license saves me so much, check out my complete guide to investing in long-term rental properties.
How much time is needed to get your Real Estate license?
In Colorado you must take 168 hours of Real Estate education before you can take the Colorado Real Estate exam. That is over four weeks of classes if you went to school full-time for 40 hours a week. Most people don’t have the time to devote 40 hours a week to Real Estate school. It took my friend 8 months to take the classes and pass his Real Estate test. He had a full-time job and was forced to take classes after work and on the weekends. He took his Real Estate classes online so that he could have a flexible schedule. Here is a great resource for the state requirements in all 50 states. In Texas you need 210 hours of education, but in California just three courses are needed.
What do you have to do to get your Real Estate license?
There is more to getting your Real Estate license than taking classes and passing a test. Real Estate is a highly regulated industry and here are some of the other requirements in Colorado.
- You must pass a background test, which involves being fingerprinted.
- You must pass tests and quizzes to go along with the 168 hours of education you take. The education required for a Colorado Real Estate license is not a breeze through the park. A quote from my friend: “Reading dry material at night after work and after family time. I was usually tired. The tests at the end of each section were flipping impossible. They would ask about minute details that had little to do with comprehension. My school didn’t even try to make it interesting or add commentary. They pretty much copy and pasted out of the Colorado legal documents on the topics.”
- You must hang your license with a broker once you pass the exam and the background check to activate your license. Each brokerage has different costs; some take part of your commissions and some charge base fees.
- You must buy E and O insurance and most likely will want to become a Realtor, join a local board and join local multiple listing service (MLS). It is not cheap to become an agent.
- Once you have your license you must take 24 hours of continuing education every three years to keep your Real Estate license active.
How hard are Real Estate classes?
You can take the Real Estate courses online or in person in a school. My friend took the classes online to work with his busy work schedule. In my experience and my friends taking Real Estate classes online is extremely boring since staring at a computer for 168 hours is not easy to do. Here is what my friend had to say about his experience with the Real Estate education.
” If I could do it over again I would take the classes in person if it fits your lifestyle. In person would have been way more engaging and exciting. Online is good for flexibility of hours, but that’s about it. The material is pretty dry, so it’s exhausting reading that much on a computer screen for that long. You are probably fully familiar with this. Some online schools are starting to do video based instruction. I personally would put this in last place. With written material, you can move at your own place and easily copy/paste, and review sections as needed. Video would be at their pace and you’d have to manually take notes. I’d avoid online video like the plague.”
I took the classes online 11 years ago and I struggled to get through the courses. I had been around Real Estate my whole life and I still had a hard time reading all that information online.
The material that is covered in the classes is very dry. If you are hoping to learn how to invest in Real Estate or learn advanced techniques in selling homes, think again! The material is about technical laws, rules, settlement sheets and case history. Very little is covered on material that will help people sell houses or help you personally invest in Real Estate. The material is meant to keep people from going to jail for committing fraud or misleading buyers and sellers, not to actually help you succeed.
How hard is the Colorado Real Estate test?
The Colorado Real Estate test is not easy! To tell the truth I failed it twice myself even though I thought I would breeze through it. Many of the questions on the Colorado test are very tricky with double negatives and wording meant to trick the test takers. There is also a ton of memorization needed and you need to be able to do math for the settlement sheets! The test is about memorization and your ability to take tests. The test itself takes up to four hours, is conducted in a high security test center and you aren’t allowed to bring notes.
My friend passed the test on his first try, but as he says he is used to taking exams like this. He has his MBA and has taken many similar professional exams in his previous corporate career.
How much does it cost to get your Real Estate license?
In Colorado, the Real Estate courses vary widely in cost. Some online schools cost as little as a few hundred dollars, while classroom school courses can run into the thousands. The exam itself costs $80 and you must also pay an accredited company or a law enforcement office to fingerprint you. Once you get your license you will have continued costs like board dues, MLS dues, operating expenses and fees or commission splits to pay your broker.
If you want to become a Real Estate agent, make sure you research what is involved in your state. Some states have easier requirements than others, but it is difficult to get your license in most places. It costs a lot of money to become a Real Estate agent, but it is well worth it in my opinion. Becoming a Real Estate agent saves me a ton of money and allows me a better opportunity to buy properties below market value. I consider those bonuses on top of the incredible income you can earn from Real Estate. For more information on what is required after you get your Real Estate license read here.
If you would like more information on how to succeed in the Real Estate business, please check out my book How to Make it Big in Real Estate. I give a great description of the book here that describes what is included in the book and how it can help anyone interested in becoming an agent or is an agent become more successful.