Many seniors like the idea of continuing to earn extra income during their golden years, but the thought of once again chaining themselves to a desk makes them hesitant to go back to work. Today’s active retirees prefer freedom and flexibility in the workplace—after all, few relish the thought of missing out on a family vacation with the grandchildren. So what types of careers fit the needs of today’s older adults? One field ideal for many is real estate. Unlike a traditional 9 to 5 job, real estate agents work a flexible schedule. Many brokerages have few rules dictating how many hours individual staff must work, and how much or little a senior can earn in the field depends primarily upon how ambitious they are. Here is what you should know about entering such a career if you’re looking to earn extra income in real estate after hanging up your apron on your day job. What Requirements Must You Pass? Licensing requirements for real estate agents vary by state. Some states, such as California, require well over 100 hours of classroom training before you are eligible to sit for the licensing exam. [1] Others, such as Pennsylvania, require roughly half the seat time but require new agents to be licensed under the direction of a broker. A real estate sales agent does work under a broker, but in many cases, the relationship differs from that of the standard boss-employee. The broker exists to review contracts, clarify terminology, and help newer agents avoid costly mistakes. However, they rarely manage tasks such as scheduling working hours, unless you choose to work for a new home builder who requires the property to be staffed during certain hours. All real estate agents must undergo continuing education courses to maintain their licenses. When you decide to interview brokers, ask the following question: What opportunities exist for continuing education with your firm? Not all brokerages offer classes in house, but some do. This can be an important factor in deciding which company is the best fit, as in-house courses save you money. The costs associated with becoming a real estate agent are less than professions requiring a university degree. However, you will need to pay for schooling, continuing education if your firm does not offer it in-house, and fees to the National Association of Realtors if you wish to use the official title of Realtor. What Opportunities Exist for Realtors? Multiple means exist for earning money in real estate. Many agents choose to specialize as either buyer or seller agents, and in some states like Colorado, doing so is a requirement of licensing. Buyers agents work primarily with clients in locating a suitable property, showing it, and negotiating on their behalf to score the best deal. Sellers agents, conversely, get the property ready to show, run open houses, and advise the seller on the best terms for them. Such an arrangement creates much flexibility in scheduling—your schedule is determined by client need. This does require the discipline older adults have mastered over a lifetime. [2] With no boss hanging over your head, few will penalize you for canceling an open house. However, if you miss out on the opportunity to make a sale due to your absence, your pocketbook will be empty and your clients will begin to lose trust. Another way to earn money in real estate is through property management. A property manager is a licensed agent who manages rental units for clients who live out of town, own multiple locations, or lack sufficient time to deal with the collection of rents and maintenance issues on their own. [3] Tenants often prefer working with management companies and will pay a premium knowing their concerns will be handled in a timely fashion, and owners receive more free time—a true win-win. Yet another opportunity for budding real estate agents is working with a new home builder. While this limits the inventory you have available to sell, it has the considerable advantage of bringing clients to you instead of having to work to build up a base. [4] You often have slightly less flexibility in scheduling with such an option, as builders need model properties manned during certain hours. However, you’ll work shorter hours than those in other professions on average, and you can earn considerable extra income. If you discover you’re passionate about the field, you can pursue your broker’s license. Requirements vary by state and usually demand you hold a real estate sales license for a specified period before being eligible to sit for testing. If you pass, you can open your own firm and practice any type of real estate you enjoy best. Creating Extra Income in Your Golden Years Creating extra income in your sunset years doesn’t need to mean chaining yourself to yet another desk. Real estate is one field you can excel in at any age. There’s no better time than the present. Get started on the path to your exciting new career today! Sources [1] https://www.kapre.com/real-estate-courses/california/state-requirements/ [2] https://www.messiahlifeways.org/blog/best-encore-careers-for-seniors-in-central-pa/ [3] https://www.nolo.com/legal-encyclopedia/landlord-hire-property-management-company-29885.html [4] https://www.realestateexpress.com/career-hub/grow-your-real-estate-career/selling-new-construction-homes/ Are you considering a “second career” as a real estate agent? What questions do you have?  Comment below!   Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! 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The broker. If you’re a real estate agent, you’re probably reading this with seriously mixed feelings. Here you are, working like a madman to make a living or earn an extra buck, and as soon as some hard earned cash comes your way, you have to part with it (or at least a piece of it). A big chunk of your cake is what I’m saying. But that broker does offer some advantages, right? Well, hopefully. Read on. See, while brokers seem to offer plenty of advantages to young real estate agents, more often than not, they’re the ones getting all the advantages from their agents. In the end, the agents are lured in by a good brand presence, and many other traps they didn’t think existed catch up with them later. It soon becomes a downward spiral and a top reason why so many do not continue their work as real estate agents. But do real estate brokers really give nothing and take advantage, or is there a bigger picture that agents need to look at while choosing the brokerage house to work for? Let’s weigh the pros and cons. The Cons Unfair Practices There are many stories out there of how real estate agents were duped out of their earnings because they associated with the wrong brokerage firms. Today, there are many brokerage firms that take in young, ambitious agents and make them do all the hard work under the umbrella of their often very well known brand name. While they may offer good exposure, the agents often ends up doing the hard work for very low pay while never even coming close to receiving the exposure that was promised. This can bring down the morale of the agent who just started out in the market. Low Commissions There also isn’t much money to make when young agents associate themselves with well known brokerage firms. As you know, an agent’s pay comes from the commission they receive when a property is sold. So, while they receive a commission after a property goes into settlement, association with a brokerage firm changes the figures drastically. They now have to split the commission that would have been theirs entirely had they been able to make the deal on their own. These splits are usually unfair to the agents, who have very little say when it comes to commission splits at brokerage houses. This is especially true when the agent isn’t getting much value from broker. That’s a bitter pill to swallow. Not Many Leads Despite a high commission split, leads at big real estate brokerage firms are hard to come by, especially the good ones. That’s because a large team of agents is already in place and they all have their eyes on the next big deal. Also competing with the new real estate agents is a team of experienced and mature agents who will get a big piece of the big deals. So keep in mind that despite being associated with a top brokerage firm, you could still be getting the low end deals. And you know what? The whole two hour allotted timeframe to answer the phone with the hopes of picking up a seller lead is complete BS in my opinion. High Fees Besides the commission split, which is often pathetically low, agents are often also subject to high fees from brokerage houses. The inexperienced agents are hit with a range of other fees, such as office space fees, internet charges, paper fees, advertising fees, transaction fees, course fees, training fees, toiler paper fees (that’s a joke), and many others. Some even end up as administrative assistants or doing nothing else than bringing in leads. A large number of brokerage firms even work with a flat fee that is “supposed” to cover fees for all services offered. The Pros While the commission structure for real estate agents is unfair, associating with big real estate brokers — or rather brokerage firms — is not entirely a bad idea. Working with a big brokerage firm has a good side to it as well, and that’s the reason why many young agents would love to work with some brokerage firms. Brand Presence Brokerage houses have usually been around for years. They often come from agents with a lot of experience in the field who were able to really make a name for themselves. Their strong presence has been established over all that time, and their brand often enjoys a decent reputation and great brand recall among the people who live in the area. This is a great plus for inexperienced and beginning agents who can form their network with less effort. Their Networks As these firms have been in the market for a long time and are comprised of teams of people, they have often created huge networks within their value chain. So while the brand name gets them more business, the network helps them identify, buy, and sell homes easily and with less effort. Deals that would have been otherwise impossible for new agents to pull off are suddenly attainable with a network like this. The Training While the real world out there is the best training ground, brokerage houses are places where you can easily find experienced mentors. The learning curve is a lot flatter with these people around you. They often bring some invaluable insights to the table. What you learn at a brokerage firm with good reputation can shape your career up ahead. All you have to do is listen and keep an open mind. So What Should a Real Estate Agent Do? Given the pros and cons of associating yourself with brokerage houses, one can conclude that despite the low commissions and high fee structures of brokerage houses, there are some very clear advantages. Their experience and brand name can really be a stepping stone for the career of young real estate agents. So while it is a great idea to associate with a brokerage firm, you need to choose the one you work for with care. But I do have some suggestions for those starting out in real estate. Know what you want. Real estate agents need to decide on what they want from the brokerage firm. Do they want the network or would they rather keep a higher commission split? Would they like to be trained there? Usually, the more a real estate agent expects from a brokerage house, the lower his/her commission will be. So decide on what you want, and then set your expectations. Also, choose the brokerage house selling the highest number of properties in your area of interest because that’s where the highest number of deals will be. Look at your deal. Keeping in mind what you expect from the deal can go a long way in helping you make the right choice. So, a brokerage firm that provides training to young realtors may actually charge you more. This is because they are also charging you fees for the training they offer. Alternatively, the lower the amount of training a firm provides, the larger would be your commission as well. Additional services provided by the brokerage firm would also cut into your commissions. So decide on what you require in the deal. Expect the split of the commission to feel unfair. The standing of the brokerage firm and their network is what got the deal in the first place. And because you have to depend on these factors, the split is going to be uneven. However, having said that, don’t agree to commissions that are too low. You’ll lose your motivation, and after all, you’re supposed to have fun doing this as well. Opt for transparency. Opt for a brokerage house that plays open cards regarding their fee structures and commission splits. Look for information on what to expect when you really associate with them. Work with a firm that spells out the percentage of commission that you as a real estate agent will get, regardless of who makes the purchase. Make sure that there are no hidden costs involved. It needs to be clean and easy to understand. And only when you’re sure about the deal, go for it. Know there are alternatives. If you’re an independent worker and have the grit to make things happen, there are brokerage firms that follow a monthly fee structure instead. That means you won’t be paying a percentage of your sales. Instead, you’re keeping all of it. That’s right, 100% of the commissions would be yours to keep. It’s not for everyone, though. If you’re that kind of person who really needs a framework to function well, you’re probably better with a different structure. Just keep in mind that it comes at a cost. Real estate brokers can be extremely valuable resources, and though it isn’t always easy to find a good brokerage firm, young agents should spend time and check with their network to identify a good firm to join. Good brokerage firms are well versed with the neighborhood, know about listings more than locals, and are familiar with what it takes to get a good deal. They have a good network along the value chain as well, know how to identify the genuine buyers and sellers from the list, and also know what to pick from the internet and what to ignore. It also goes without saying that young real estate agents will learn faster when associated with experienced real estate brokers. However, well versed as they may be, they can also be an agent’s nightmare by giving them low commissions and charging ridiculous fees while making them do the all the work. The solution lies in choosing a brokerage firm that provides what an agent is looking for. Real estate agents: What’s your experience in working at a brokerage? Would you add anything to this list? Let me know with a comment! Free eBook from BiggerPockets! 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Staying committed and checking in with a client can pay off more than a year later. This is why it’s worthwhile to be in it for the long haul. Getting to know property owners and learning about their experience with the real estate market is a crucial aspect of understanding their motivation to sell without a real estate agent. In fact, one of our successful associates learned early on that listening to and following up with a potential client can have a high return on investment. This is especially true when considering the three paydays my company creates on most deals. Keeping that in mind, you’ll start to realize the enormous profits left on the table if no follow-up is done. How to Establish a Relationship With Prospective Sellers Here’s a story about an associate of mine, who started laying the groundwork for a deal with one of his first phone leads. Every 90 days he would check in and see how the owner was feeling about the market and his property. After a few phone conversations, he and the seller started establishing an ongoing relationship. By doing so, he got a better feel for why the seller was or was not selling—simply by listening. After about six months, the seller confided that, while he wasn’t ready to sell just yet, he had decided he would be in touch with us when he was ready. He went on to explain that circumstances (like one of his children returning home to live with him) had delayed the sale. Unfortunately, that was not something we could help with. But he also revealed that his past experience with the house on the market was also the reason for his hesitation. He had spent a year with his property on the market. And after dealing with Realtors in that process, it all just felt like a waste of time and money. We simply explained that we had different methods of buying property. We also discussed why we’re able to then sell it on our end, given the expanded pool of buyers when one considers those who are rent-to-own as opposed to conventional. How to Undo Past Selling Mistakes We admitted that one of our biggest challenges when selling a property was that the Realtor’s last listed sale price is often still somewhere on the internet. As such, we told the owner to list a dream price on Zillow, which would ultimately accomplish two things: The more recent value of the house would be easily visible online and influence potential buyers’ perceptions. It would give the owner a taste of the current market. It would be unlikely to sell at the dream price. But on the off chance that the seller ended up getting that amount, we would be happy for them and move on. The deal hung around for 18 or 19 months with the house listed online for $689K, which generated some calls but no offers. That price wasn’t unfair; it’s just that the specific area was crowded with a few other listings. How Patience Pays Off When the owner was finally ready to sell, we got the house for $580,000. We listed it for sale for $679,00, which would be recognized as a discount to the pool of interested parties. It also showed the seller that the market didn’t jump at that higher price and gave him more confidence working with us. Nurturing that relationship and reassuring one another we were headed toward a deal paved the way for a great experience with the seller. We negotiated his terms for a monthly payment that was contingent upon finding a tenant-buyer. It would begin 30 days after securing their placement. Structuring the Deal Most of our deals are contingent upon a buyer, unless we’re picking up some serious additional free equity. As a new investor, you’ll want all yours contingent upon a buyer. Once you have three or more deals cash flowing, however, you’ll have the option of buying more aggressively and picking up free equity while doing it. Our associates negotiate a 30-day delay to give themselves a cushion. So in essence, they are using their continuous stream of income from the tenant by capturing the first month’s payment and starting to pay the seller’s mortgage month No. 2. As we started this article, the lesson from this situation is that deals take time. You have to commit—not necessarily full time, but wholeheartedly—to this business. And if you do, you’ll love the rewards. The Deal Summary Source: Expired Listing Purchased: $580,000 Listed: $679,000 Payday #1: $70,000 Payday #2: $26,778 Payday #3: $27,288 ($508 principal paydown x 36 = $18,288. The markup, minus the $70K up front = $9,000.) Total: $124,066 If you’ve followed past articles, you know that our paydays across the country, on average, range from a low of $45,000 to a high of $120,000. We’ve seen exceptions of $30,000 and even $300,000—and this one came in slightly higher than the high average. What’s your best advice on establishing relationships with would-be buyers or sellers?  Share in a comment below!   Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

People are a part of every deal, but in a recent case, we added an inherited renter—and their rent—to the package. We were actually happy to keep them at this multi-structure property, as we used it to sweeten the deal for the buyer. The Property: LakeView The Connecticut property, which we’ll call LakeView, could be a main residence or a vacation home—with a stellar view of a lake, hence the name. The seller was using it as a second vacation home, which was across the country from his main residence. The home included a legal in-law suite downstairs. Also on the property was a separate garage with a one-bedroom suite above it, which a family friend was renting while keeping an eye on the rest of the property. Related: How We Found an Extra $400K on Two Properties The Deal Summary: LakeView The seller had inherited everything as part of a family trust, but the distance and a life event had motivated him to sell it. This deal stands out from our average terms deals because it was top-loaded with principal and monthly payments. The way we structured this with our buyer, we got a lot of our proposed profit from three paydays up front. That does happen on deals, but I’d say only roughly 10 percent of the time due to a high down payment (payday No. 1) up front or over time. Here were the specifics for LakeView:  Purchase Price: $399,000 Monthly: $1,000 principal-only payments x 48 months Sold: $429,900 (monthly lease = $1,750) Payday #1: $80,000 ($20,000 up front and three more $20,000 payments every 6 months for first two years) Payday #2: $26,000 ($550 monthly spread (rent minus the $1K monthly to seller and insurance payments) Payday #3: -$2,000 ($30,000 markup + $48K in principal paydown – $80K paid) Total: $104,000 ($80K + $26K – $2K) The LakeView property was in a high-tax area, but to be clear, we pass taxes on to our buyers so their total monthly is approximately $2,750 with $1,000 of that being taxes. Related: Lease-Purchase Agreements: What If There’s an Existing Tenant? The Icing on Top: An Inherited Renter Remember that second structure? It turns out the seller had a family friend living in the unit above the garage, who was paying roughly $700 a month in rent. We met with him. He was a great guy and interested in staying in the property. We took this news to the buyer, who would ultimately inherit that tenant. We explained they could take that rent only after their net $20,000 came in, so at that point, we’d know they had $40,000 in the deal. It added some incentive for them to stay on time with rents (part of criteria to get to the point of taking the deposit), and it generated $700 more cash flow to us monthly (not figuring in the $104,000 above) until the time hit for them to take over. That tenant represents a revenue stream, another payday really, so we dangled the carrot to the buyers by agreeing to hand over his rent once they made the second down payment of $20,000. This would occur six months after the deal. During those six months, we did in fact collect $700 a month from that tenant, which totaled $4,200 and pushed our grand total in profits on the LakeView property to $109,000! Yes, that’s a six-figure profit, even after the negative payday No. 3—an impressive deal. In the aftermath, we talked about the sale price of $429K and the terms in our review of the sale. We felt like we could have tested the market more. However, getting the deal done in three weeks allowed for some peace of mind and the ability to move on to the next deal. Imagine what a few six-figure profit deals could do for you in a few years! It’s not unheard of when you treat real estate as a business and establish effective systems, but it does require working hard and smart. Do you have any questions about the above deal? Would you ever sell on terms? Why or why not?  Leave a comment below!   Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you