This is a great time to buy a property from someone because the owner likely wants to avoid foreclosure. Foreclosures drastically decrease credit scores and the likelihood of qualifying for future mortgages. By approaching people in this situation and purchasing their homes, you are preventing those drastic decreases and getting a property for less than market value. Meaning, these are prime properties to purchase and then rent to own.
But there’s a catch.
Owners spend a lot of time and money on owning their homes. Many will be reluctant to sell their home for what they owe on it because of what they have invested. Those owners would likely want to sell the property for what it’s worth.
Where Does That Leaves An Investor?
When you’re not a real estate agent, that leaves you empty handed and you have to move on. However, investors with their real estate license can keep moving forward with their deals. That’s why I got my real estate license.
In the case that the owner does not want to sell their home for a bargain price, I offer to help them sell their home for what it is worth. It takes time to find a good property in pre-foreclosure and, once you find one, it’s a shame to walk away. I was losing so many valuable prospects when I could have just been repurposing them.
Rather than taking a total loss, I can earn a commission by selling their home for them, which is a better alternative than making no money off the deal at all.
What Benefit Do You Get From A Real Estate License?
I described the reason I got my license above. I get at least 3 percent commission off of the homes that I sell, which is always a few thousand dollars and worth the time I put into them. The hardest part of being a real estate agent is finding people who want you to sell their home. However, I am a rent to own investor. My goal is not to sell properties; it’s just a better way to use the prospects I already found from renting to own. The time and money no longer go to waste.
Additionally, by registering with a broker, I get access to the Multiple Listing Service. The MLS has helped me find properties priced below market value to invest in, without going the pre-foreclosure route.
The other real estate agents I’ve been able to network with at the brokerage can refer clients to me too. They may come across a prospective buyer who isn’t ready to qualify for a mortgage, but is ready to start the homebuying process. For a real estate agent, there’s no benefit to this type of client because there is no way to make a commission if they do not purchase the home, but they are a big help to me.
Overall, having a real estate license has allowed me to expand my rent to own business. I’ve made more rent to own deals plus profit from the property acquisitions that didn’t work as planned.
Having a real estate license is like having a Plan B that supplements your Plan A. They don’t cost a lot to obtain and can only boost your resume. So, why not?