How I Finally Realized as a Real Estate Agent That the Money Isn’t in Selling Houses — It’s in Buying Them

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When first becoming a real estate agent at age 26, I realized someday I’d probably fix up houses, especially since I had worked in construction all through college and continued to do so for an additional nine years before starting my own painting company. About seven or so years after starting my own painting company, I also became an investor agent instead of being just a regular real estate agent.

It’s funny how most real estate agents never really become real estate investors. We may start out owning our primary residence, maybe a beach home or the typical duplex, but few of us go on to own large portfolios.

So, why is that? Isn’t that almost like a stockbroker who never invests in stocks?

In the beginning, I needed income plain and simple, thus the two jobs. I made ok money on my day job, but I wasn’t going anywhere quick working for the man. This was easily proven years later when I started my own company and doubled my income the first year out.

It was my second job of being a real estate agent that ended up being the real wealth builder. Real estate commissions tend to be larger checks, and I could bank them since my family and I could live off my day job’s income. This worked out okay, but it was really a get rich slow kind of model — until I realized the money wasn’t in selling houses; it was in buying them.

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Trading Commissions for Equity, Tax Breaks & Cash Flow

Looking back, as time went on, it was easy to see that I was a selling agent for several years, then an investor agent and then eventually a buyer of real estate assets.

Related: How I Used Creative (Re)Financing to Make a Small Commercial Property a Valuable Asset

At first I thought if only I could sell more houses — or sell more expensive ones — then I’d be rich. Studying to be a real estate broker had started to open my eyes to working with investors. But it probably wasn’t until I read Robert Allen’s book Multiple Streams of Income that I started to change my approach. It was then that I started working with investors only, where each buyer would buy multiple deals.


Since I was doing the property management, and I had formed my own titled company, I was getting paid multiple streams of income from the deal (i.e. real estate commissions, a monthly fee for property management, a finder’s fee for getting a lease signed, and quarterly distributions from my title company, etc.).

After working with investors for a while, joining groups where they hung out and networking with them on a regular basis, I began to learn how and what they did to build up their portfolios. Thinking back, it was probably the opposite of what most investor agents do. They become investors first and then become agents later to save money on taxes, save on commissions, and get more deals by having better access through their MLS memberships.

Advanced Strategies: How I Started Getting Creative

It wasn’t until years later, after following some of the Jack Millers and Pete Fortunatos of the world, that I started to get really creative. Real estate investing started to become a fun game.

As I became more focused on finding motivated sellers, I also started to utilize other strategies, such as lease options and even “subject to” deals, where I could control the deal rather than owning it.

Although today I focus primarily on distressed, institutional real estate assets, folks like Jack started to change the way I thought about deals.

Related: The Lease Option: How I Creatively Structured a Deal With Very Little Down

For example, in the old days when I got a call to list a house for sale, I went out there looking to earn a commission by listing and selling the property. Jack showed me that the best deal may be to put an option on the property and then to later sell the option. Selling the option can be more lucrative than just a real estate commission, and at the end of the day, you’re still helping the seller sell the property.

Another one of my favorite strategies was the lease option. Wendy Patton was a real estate agent and national speaker who probably mastered the strategy as well as anyone, and I attended several of her live seminars when I started doing lease options.


This is also a more lucrative strategy than simply collecting the commission and monthly management fee. For example, let’s say a property is worth $100k and rents at approximately $1,000 a month. If I was doing the property management and I found a renter for the property, I would charge a rent finder’s fee of $1,000 and an 8% (or $80 a month) management fee.

If I did a sandwich lease option on the property instead, I could get $3,000-$5,000 down as a non-refundable option deposit, and I could rent it out, making a few hundred a month on the spread between what you pay the home-seller and what you charge the rent-to-own buyer. Plus, there’s no maintenance for me to do at all because the home-seller would be responsible for any expensive repairs (over $300) and the rent-to-own buyer would be responsible for any repairs under $300.

As you can see with other advanced strategies like using private money (or hard money), there is almost no limit to how many deals you could do, whether that’s full-blown rehabs or rent-ready deals. If I knew then what I know now, I could have kept all the properties (approximately 75/year) that I sold to other investors because I didn’t really need any money; I just needed OPM (other people’s money).

So if you’re an investor agent, which do you really prefer: buying or selling?

About Author

Dave Van Horn

Since 2007, Dave Van Horn has served as president and CEO of PPR The Note Co., a holding company that manages several funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, a real estate investor, and a fundraiser. As the latter, Dave has raised over $100 million in both notes and commercial real estate. In addition to his investments and role as CEO, Dave’s biggest passion is to teach others how to share, build, and preserve wealth. He authored Real Estate Note Investing, an introduction to the note investing business, helping investors enter the “other side” of the real estate business.


  1. Mike McKinzie

    Your blog is right on the mark. But it is so hard for people to see when they are in the midst of it. My license expired in the 90s and I am studying for it again, for one reason, to BUY property!! There are so many ways to make money in RE but the most important is INFORMATION, and being an agent is the best way to gain that information!

    • Dave Van Horn

      I agree Mike!

      I love the information being an agent provides. I’ve also found that for deals I’ve done that I’ve found on the street or with family/friends have always been helped by my being an agent. Something about it makes Harry Homeowner feel more comfortable working with you.

      Also don’t forget that as an agent, you get the added benefit of unlimited passive losses that offset earned income! (so you’re not capped at the usual $25K).


  2. Douglas Skipworth

    Dave, this is no joke. I read the title to the blog post and thought, “Now that’s an article I want to read!” Then I looked to see who wrote it and chuckled to myself when I saw your name. Great post, my friend!

    I started as an investor then became an agent, property manager, and lender. Like you, it has always baffled me why more agents don’t own rental property. I’m also shocked by how few property managers and property management employees actually invest in rental houses.

    Thanks for the encouraging post. I’ll definitely be sharing it with some of the agents I know.

  3. Joshua Dorkin

    Ever since I got my real estate license, it astonished me that more agents didn’t buy property. This is the single most obvious path for an agent . . . sadly, huge percentages of these professionals fail to take advantage of the knowledge they have to build real wealth for themselves.

    • Dave Van Horn

      Thanks for the comment Josh.

      I agree, RE Agents see a lot of the greatest opportunities before anyone else. I think the reason this path is overlooked with a lot of agents is the same reason it’s overlooked with most people who aren’t investors: the focus is on income instead of building wealth/wealth retention.

      I was the same way starting out. I was too busy working in the business and not on it, I didn’t have the capital to invest (or thought I needed to use my personal capital to do so) and I thought the answer lied in working for my money instead of making my money work for me.

  4. Jerry W.

    Thanks for the article Dave. I always enjoy reading your posts and the expertise you bring. One of these days I want to pick your brain on how a person goes about buying NPR from local banks or if it is even a possibility. I expect to see a lot of NPR and wonder if I could buy them cheaper than buying the properties at the courthouse.

    • Dave Van Horn


      That’s one of the reasons I got into notes, I prefer working with the banks because it’s less competition for the deals – pushing us ahead of the sheriff sale at the courthouse, REO’s, etc.

      Message me on BP and we’ll set up a call.


  5. Cydni Anderson

    Thanks, Dave for another great post!

    This is exactly what I’m trying to learn- lease options, options and Sub-2. It was the primary reason I got licensed again.

    But it is a bit over-whelming. I’m not a great negotiator, more than willing to admit that. I’ve read tons about doing LOs and just saw Ron LeGrand a few weeks ago.

    So far I’ve made tons of calls with no luck. It’s not as simple as the “gurus” would have everyone believe. I’m trying hard not to get discouraged, but its a challenge. I’m on the verge of financial ruin, which makes staying focused and positive a daily battle. I keep telling myself, just one deal… that really is all I need to get my head above water.

    I’d love to find a small house or condo I can take over Sub-2 for my personal residence. Any advice from those out there making this niche work is always appreciated.


    • Dave Van Horn

      Hi Cydni,

      Thanks for the feedback.

      If you haven’t checked them out already, I would recommend Wendy Patton’s book on Lease Options. Also a big help for me starting out was a book called “Buying Real Estate without Cash or Credit” by Peter Conti and David Finkel. Not only do they show you interesting strategies, they also give you the proper verbiage so you know exactly what to say when you talk to a motivated seller.

      In the past, when doing Sub-2 deals, I’ve found that it’s more of a knowledge based transaction rather than a negotiation (not to say you shouldn’t tweak terms to make them more favorable if possible). At the end of the day it’s really more about giving the right motivated seller options that work for both you and them.

      So don’t give up, it’s a numbers game. The deals are there, so the more motivated sellers you see the better. Running ads, calling FSBO’s, utilizing bird-dogs, searching every day is really the only sure-fire way to success.

      Hope this helps.


  6. Chris Watkins

    This was a great article – Thank you. I am somewhat new to the forum, and my have missed some of it, but I wish there was more on BP about Agent/Investors! I got my license for this very purpose – to invest. Thanks for the book recommendations, always looking for more recommended educational resources. I’m especially interested in the creative real estate books mentioned above. Thanks Again.

    • Dave Van Horn

      Hi Chris,

      Thanks for the kind words.

      And I agree! I actually had a similar issue when I first started using BP years ago looking for information/threads discussing notes. That’s when I started posting topics in the forums myself and blogging. Today I’m apart of the official BP blog and notes seem more popular than ever on the site! My point is this: reach out to the BP community via the forum, messages, member blogs, etc. and get the conversation started. There’s tons of info out there and speaking from experience, you never know who you’ll meet and what you’ll learn!


      Feel free to message me if you’re looking for more recommendations regarding Real Estate books/education.

  7. Nathan Wandell

    Very helpful. My wife and I just got our licenses back in August. We came across this site shortly thereafter and immediately saw the opportunity before us from an REI perspective.

    One question: What are some good resource you could point me to in learning about lease options, sandwich leases, etc.?

    • Dave Van Horn

      Hi Nathan,

      Glad to hear it!

      Not sure if you saw in one of the comments above, but I recommended Wendy Patton’s book, “Investing in Real Estate with Lease Options and “Subject To” Deals”.

      Also another book that was a big help for me when I started out was “Buying Real Estate without Cash or Credit” by Peter Conti and David Finkel. The book deals with multiple no money down strategies. It’s also a good resource because they tell you exactly what to say when you talk to a motivated seller.

      Hope this helps!


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