not a place to live in, but investment like buy, fix and sell.
can you invest in real estate when you are a real estate agent, are there any downs?
what is the difference if you are a real estate agent and invest and if you are not a real estate agent and invest?
the reason i ask this is because one of my friends is a real estate agent and he makes investments but the houses he buys are never under his name he tells me that's the smart thing to do, but why? there must be something, i don't understand, he has very good credit never married no kids and enough money for down payments 20% every time he buys,i don't get it, im i missing something.
i asked in different ways because some people just don't get it and i'm trying to avoid useless answers, it would be very helpful if you answer all the questions, thank you.
2006-09-06 20:57:25 · 5 answers · asked by chicafresa 2 in Business & Finance ➔ Renting & Real Estate
if you are a real estate agent and you buy a house that is being sold by a real estate company you can collect 2% from the sale of the house as your fee. That is one upside of being a realtor. The reason you dont want the house in your name is for insurance reasons. You need to protect yourself by forming a company and buying and selling houses under the company name. You will need to have a CPA for tax purposes unless you are capable of doing that your self. You have to keep track of all expenses everything from the cost of the house down to paint brushes and paper towels. The most important thing is turn around. Dont bother with a house that you cant sell in 1 month. If you have to make monthly payments you are losing money. You need to put the house on the market and make all repairs in 1-2 weeks and sell the house before the first payment is due in order to make a profit. There are other ways to make money on real estate such as development, rentals, leasing, leasing with option to purchase, commercial real estate. Good luck, it is one of the easiest ways for someone to make money if you end up being good at it.
2006-09-06 21:05:14 · answer #1 · answered by searay092003 5 · 0⤊ 0⤋
First of all, now is not the time to invest in real estate.
Having said that, if you are still interested read on.
Yes, you can invest in real estate even if you are an agent. However, some agencies forbid it due to ethics and conflicts of interest.
The difference between a licensed agent and an individual is - know how (laws), connections (builders, contractors, interior designers), and experience. Savvy comes with the territory, so agents have the upper hand.
In the case of your friend, you asked, "there must be something I don't understand." There is, he is lying!!!
The majority of agents are liars, friends or not. There are three reasons why they lie...
First, to impress others to make it seem as if they're assets are worth more than they actually are.
The second reason an agent lies is to hide something. Weather it is mistakes or miscalculations.
The third and most common reason why agents lie is to dissuade others to go into the field.
When the market was booming, thousands of people started taking classes. Many took lessons and advice from underqualified staff. Anyway, that's when agents bacame wary of the influx of new agents. More agents = more competition.
If I were you, do a little research on your friend. If he is giving you financial advice, check his bank statements first. See what he's been up to. Then cross check the advice he gives you... see if it is sound. Then if you must, pull the trigger and invest!!!
2006-09-07 04:29:49 · answer #2 · answered by Prince V 2 · 0⤊ 0⤋
In short you can do everything either way but as a real estate agent you are bound by more laws and might fall into a trap where a customer of yours says something that will make you want to buy the property and you are in a conflict of interest.
With that being said as a real estate agent you can split the commision of some deals saving you a few percent which can add up.
As for your friend not closing the deal in his name, makes no difference except he will be in more trouble if something goes wrong as it indicates he knew he was doing something wrong. Unless it is for the reason listed in the previous post but in that case he would be the owner or officer of an LLC or Corporation which means it is in his name anyway and the protection could be pierced for fraud and similar illegal activites.
If you are not planning on doing something illegal don't worry about it.
2006-09-07 04:05:30 · answer #3 · answered by ken 3 · 0⤊ 0⤋
It is not a good time to invest in real estate though...
In most area of the U.S., housing price stopped going up as inventory continues to build up. It is normal to see a correction as a boom that lasted for several years.
If you are investing new money in to real estate, this may not be a good time as the potential return on investment is small compare to the high risk of lower home price.
If you are doing a side way move, meaning you are selling one to buy another one, then it is acceptable.
Nothing is absolute, but housing market is very likely undergoing a correction and this is only the beginning. Some say this would be a soft landing (0 to 10%). Some say a big crashing is coming (10 to 20%).
http://money.cnn.com/2006/08/24/news/economy/newhomes/index.htm
http://money.cnn.com/2006/08/23/news/economy/homesales/index.htm
2006-09-07 04:16:13 · answer #4 · answered by Price is what you pay for value. 3 · 0⤊ 0⤋
I have two brothers, that are in that bisuness. One, buys old houses, fix them and then sells them at a higher market price. Sure he invested money, but now he's making a kill!!
The other he is a realtor. He buys property, and then he sells it. everybody needs a house. Here is Stockton, the population has been swelling due to the jobs around, the Bay Area, and San Jose.
It's the Silicon valley!! The work over there, but live in Stockton, Even they have to drive two hrs, every day one way, then 2 more hrs., coming back!
2006-09-07 04:09:43 · answer #5 · answered by alfonso 5 · 0⤊ 0⤋