The hit TV house flipping shows make it look so easy. You’ve probably thought to yourself; I can do that. However, don’t be fooled; flipping houses and making a profit doing it is not as easy as they make it seem on TV. That’s why it’s important to know as much about the business before going into it. For example, you’re probably wondering if you need a real estate license to flip houses in Arizona. Technically, no. There is no legal necessity for you to take the realtor exam before you can flip a house.
However, with that said, it is important to consider either teaming up with a realtor who has flipping experience or just going ahead and getting the license yourself. Why? Because, as we mentioned, house flipping isn’t as easy as it seems and you’ll want as much knowledge and as many skills behind you before you take a hammer to the wall, especially if you plan on doing this full-time.
How is Success Measured When Flipping Houses?
You won’t get rich overnight flipping houses. In fact, a flipper considers a flip a success when they get a 10 to 15 percent gross profit margin. Make a mistake that costs thousands and watch those numbers shrink. Make another costly mistake and you might not even see a profit. That’s why it’s recommended to do it right by getting a real estate license before going in.
Benefits of Getting Your Real Estate License to Flip Houses in Arizona
It really only makes sense to get your real estate license if you plan on doing this as a career. Otherwise, if you plan to flip a house or two and then move on to something else, there’s no need. However, if this is your new, chosen career, here are some benefits of getting a real estate license that ends in success.
No Agent Commissions
Without your own real estate license, you’ll have to pay a real estate agent commissions on the sale of the property, which can be anywhere from 5 to 6 percent.
You’ll Have a Better Understanding
There’s a lot to know about flipping houses, like getting permits, understanding disclosures, housing discrimination, and more. This can all get confusing to someone who doesn’t know the real estate business. However, when you get your license, you’ll have all this knowledge tucked away inside your brain ready and waiting for you to use at a moment’s notice.
Get Access to the Multiple Listing Service (MLS)
In order to have direct access to the MLS, you need to be a registered real estate agent in Arizona. You’ll want access to the MLS to find houses to flip in a competitive market. The hardest part of flipping a house is not the actual work done, it’s finding the right property to flip. When you have access to the MLS, you can set up notifications that alert you when a new, hot property is up for sale. This gives you an advantage in the market.
As a working real estate agent who flips houses, you’re going to meet all kinds of people in this business, like contractors and other professionals. The more you people you meet and the more houses you flip will build your network and you’ll start getting word-of-mouth opportunities across your path.
When it comes time to sell your flipped property, buyers will put more trust in you when they know you have a real estate license. The majority of Americans prefer to use a real estate agent to purchase a home than go it alone.
How to Get Your Real Estate License
States follow the same basic process for obtaining a real estate license, which includes ensuring your eligibility (age and citizenship requirements), taking the pre-licensing course, passing the state licensing exam, and then activating your license, which costs between $200 and $400. You will also have to pay for access to the MLS on an annual basis. In Arizona, this is about $225.00 per year.