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Real Estate Investor, Agent, Or Both?

By
Services for Real Estate Pros with ForeclosuresMass.com

When I first got started in real estate investing, I read a LOT of books. One thing I seemed to hear again and again was "Whatever you do, do NOT become a real estate agent if you're going to be an investor."

As a new investor, I believed most of what I read and heeded that warning, but it always stuck in the back of my mind and I found myself wondering why you wouldn't want to be both. After some research, I found that the big reason you're not supposed to be an agent AND an investor is that as a real estate agent (or broker, or Realtor), you're held to a "higher level of responsibility".

If a dispute ever arose between you and someone you were involved in a transaction with, it could be argued in court that as a licensed agent, you knew more than the other party, had an unfair advantage and used your additional knowledge to take advantage of the less knowledgeable party.

Herein lies the big question.

Do you plan to take advantage of someone you're doing business with?

Hopefully, your answer is "No."

As a real estate investor and/or agent, it's our ethical obligation, licensure aside, to put together fair, legal and "above board" deals.

So if you're putting together deals ethically (as I hope you are) then it begs another question:

Why would you want to be both an investor and a real estate agent?

As an investor, when you approach a homeowner and talk to them about their property, you may realize that it's not the best deal from an investment standpoint, but it would make for a good listing.  There have been many cases where I had a property that just didn't fit my investment criteria, but it made more sense to list. In these cases, we listed and sold the properties on the market and took our commission.

In addition, as an agent, you get leads for sellers looking to sell, some of which may be better opportunities as investments. As a real estate agent, what happens when you're meeting with a seller and you realize that the deal you're looking at has a lot of upside potential, and you would rather pick it up yourself?

Simply switch hats, put the listing paperwork away, and put on your investor hat.

What kind of opportunities do you miss out on when you're only an agent?

A fellow real estate agent at an office where I used to work was a top sales agent. He would knock through 300 cold calls a day, line up dozens of closings a month, and top the charts in the office month after month.

He was a fantastic real estate agent.

One day, he came across a listing where the seller wanted to simply "walk away." In investor speak, this was a "Motivated Seller." The seller was leaving over $90,000 on the table and was wanted to be done with the property and move on.

Our fellow agent listed the property, brought it to closing and the seller walked away with a check for just over $90,000. Our agent friend was busy working on other deals when he got a post-closing call from the seller looking for help.

The seller didn't know what to do with the check, didn't have any place to put it and just needed some money to put gas in the rental truck on their way out of town. As a real estate investor, our friend could have solved the sellers problems from the get go, helped them with the move, put some cash in their pocket and taken away the problem property all while hanging onto the excess $90,000.

So when it comes down to choosing between being a real estate investor, an agent or both, I hands down choose both every time. It gives you more options and opens more doors to more deals.

---

Jeremy B. Shapiro is a nationally recognized expert on the real estate industry and has been featured in the Boston Globe, National Public Radio, NPR Morning Edition, CBS Nightly News, Fox News, Boston Business Journal, PBS and has even been interviewed by Toyo Keizai - the Business Week of Japan.

To learn more about how local investors are routinely pocketing $10,000+ per deal - even in today's economy, visit:
  http://www.ForeclosuresMass.com/introcd/

Corry Shadle
Magnolia Realty Services - Elizabethville, PA

I am an investor and realtor i make sure i disclose i am a lisenced agent in all deal i do

Feb 04, 2009 12:24 PM
Jeremy Shapiro
ForeclosuresMass.com - Framingham, MA

Corry, that's a very smart idea. Even as an investor, it's always smart to disclose that you're a Realtor, which can happen at the time you give the seller your business card. Kudos!

Feb 04, 2009 12:30 PM
Everard Korthals
---Preferred Lifestyle Advisors--- - Lancaster, PA
Mountain Realty

Welcome!  If ever you were to have any questions then feel free to contact us and we'll try to help. Please take a look at our blog. for links to valuable information in our blog that you can use to navigate this extensive network.  

We hope you have a great day, All The Best- 

This is great advice for the affluent realtor. The owner of Castellum has investment properties in Florida and Dubai. 

Sincerely, ( Active Castellum ( Castellum Realty llc - Lancaster PA Real Estate )

Feb 05, 2009 03:20 AM
Sandy Childs
Keller Williams Realty - Spartanburg, SC
Realtor - Spartanburg, SC

Congratulations on joining Active Rain. This is a great professional networking and referral site. Our Team is working here in the Spartanburg / Greenville areas of South Carolina. We would be thrilled for any referrals you might send our way - or any referrals that we could send to you. Hope you enjoy this site as much as I do.

Feb 05, 2009 01:26 PM
David Painter
Keller Williams Realty - Spartanburg, SC

Good to have you on Active Rain.  This is a good site for gathering information and interesting to see what others are blogging about. Contact us if we can be of service to you. We would be happy to send you a referral or to take good care of any referral you would send to us.

Feb 05, 2009 02:02 PM
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Jeremy, Welcome to AR, Be a Blogholic and start writing your own blog soon on AR. All the best for your RE business. This is the right place for customers, friends, realtionships etc.

Best - Sash

Feb 05, 2009 05:01 PM
Jeremy Shapiro
ForeclosuresMass.com - Framingham, MA

Thanks for all the welcome messages. Glad to be here.

Feb 05, 2009 05:30 PM
Robin Turner
Happy House Real Estate - Cocoa Beach, FL
Robin Turner

Being and investor AND a Realtor is the only way to go. I was an investor for several years but got my license for the reasons mentioned above. I now work for an agency, Housing Market Realty, http://www.housingmarketrealty.com , that was founded by and populated by investors.

Best of both worlds...

Feb 06, 2009 03:41 AM
Jeremy Shapiro
ForeclosuresMass.com - Framingham, MA

Robin, that's exceptional. The brokerage I went to was mainly investors, too, but grew to include many other agents. Always good to have a broker who understand your reasons for being an agent! :)

Feb 06, 2009 06:16 AM
Charles Fischer
Housing Market Realty - Merritt Island, FL
Professional Real Estate Services

Jeremy:

very interesting to hear your perspective.  I am an active full-time investor here in Florida.  I have considered getting my license, as I now see no down side.  I already handle all my transactions in a professional manner and believe that, as you say, I can offer sellers more options.  I am intrigued by your information products, as I am just beginnng my venture into seminar/information products.  Any advice would be appreciated. I have no immediate plans to speak nationally, but at the state/local level.

Charles

Feb 12, 2009 01:53 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

We invite you back to ActiveRain in 2016!

    Much has changed since your last visit to ActiveRain.  I encourage you to take another look at the website. 

    Surf some blogs, leave some comments.  Better yet, post a Blog.

    Best to you!

Jan 10, 2016 10:35 AM