Making the transition to full-time Agent. Wise or Not?

18 Replies

Can anyone shed some light on whether or not the pros & cons associated with going full-time agent vs part-time at first? What would be recommended? I am in the Pittsburgh Area, PA and my wife is in a Doctoral program and I am the only one within income.

I currently work Full commission in the car industry as a manager. 

Advice?

87% of agents fail within the first five years. Real estate is one of the cheapest "businesses" to build but it's also very hard to get it rolling and maintain.

Most agents don't even start to make a decent income until two years of effort. I see agents that do well for 2-3 years but then they stop hustling and their business dries up or they fail to budget properly and can't handle going three months without a sale.

On the other hand, I've seen some real hustlers that are making a good living within their first 12 months. But it's rare.

I tell people regularly: if you are a part-time agent, the best-case scenario is part-time success. You have to be in real estate full time if you want to be successful.

It would be risky to interrupt your income stream until your wife completes her doctoral program and gains employment. ...as mentioned if you do not have 6 months of saving or more to stay a float until your real estate earnings kick in you will be in a risky predicament @Josiah Richard

@Josiah Richard you can do both full time. Figure out what you would like to get done on a weekly basis as a full Time agent to become successful and then find a way to make that happen while still keeping your job until the doctoral program is over.

Best of luck!

@Steven Picker

That’s a really good point and one of the concerns I had. However my wife and I are hustlers, so she was pushing for me to make the move because of doing something of passion, rather than just income. I think after this we will be able to have a more informative conversation.

@Josiah Richard , I am looking at multiple options for moving into a new career so I resonate with what you are going through. One of my considerations is become a commercial broker... so I can learn the market in Pittsburgh and invest as well!

Before you consider the following guidance please understand that my partner has enough income (and we have a big enough nest egg) to support us in the worst case scenario.


I'd recommend considering the following questions:

How can I find a competitive advantage right away in the industry?

How can I build my network quickly to help people and help my family? 

What are the things that I need to know right away that can help me perform better doing this job than millions of people who have "failed" within the first 5 years(87% of agents)?

@Clayton Hepler that thought processes is exactly inline with what make successful people rather than those who do fail. I agree whole hearted with your statement. However, as you stated my partner is drawing income away as we are paying for school too. This makes it more complex, as I am use to a large income monthly.

I want to transition into the industry in some way, the biggest question I’m asking now is how? And in what capacity? At the same time exiting the car industry as the area I currently in are not utilizing best practices that align with my previous employer.

Moving for your wife’s Doctoral program can come with all kinds of fun challenges. :)

@Josiah Richard if your wife is in a doctoral program and you’re the only income this seems like a very risky and potentially irresponsible thing to do right now. Most agents make very little money the first couple years.

How many years have you been in your current field? How much money did you make your first year doing what you do now? Most agents make less than 30k their first year.

@Caleb Heimsoth I’ve been doing what I do now for about 5 years. First year made 62k roughly(as a sales person). Since then been making 6 figures plus (as a Finance manager) and my monthly liabilities are about 4K before food, gas etc. I have one rental, but tenant has been late or not paid going through eviction right now. If I had a paying tenant my overall liabilities are just under 3k.

80k is my annual minimum at this point with her in school.

@Josiah Richard my personal opinion is that transitioning away from what you do now to become an agent full time would be a large mistake, but that’s just my opinion .

Do you just not enjoy what you do currently ?

@Caleb Heimsoth it’s a car dealer, which is retail hours and very limited time off. Old school mentality and I’m two for two on dealerships since I moved, that don’t align with my standards of business (long term business minded vs short term gains)

I agree though after having these conversations. I feel much more comfortable, just looking for something that is in sales but not real estate full time.

My concerns were validated.

Really appreciate your opinion!

Thank you again so much.

I am a full time agent closed 10 million last year and love it but do have to warn you as mentioned above statistics show most agents fail. I picked a specific niche investment properties mainly 2-4 units on the north side of my city which makes people use me vs a generalist who does a little of everything but is an expert in nothing. Commissions are big people want you to know your area literally block by block otherwise they will just use a discount broker like redfin you have to have niche knowledge above what they would get with redfin to make it in 2019.

Car dealer experience should help. CRM set up is very similar. 

@Nathan G. is spot on with it being an 87% failure rate.  That is in line with the failure rate of small businesses in general at 90%.  Why do so many small businesses and agents fail?  A few reasons, which include but not are limited to two main things in my opinion.

1) Lack of working capital.

2) Not understanding how to run a business.

Being an agent is quite different from working a W2 job. You are a small business owner.  And businesses need capital regardless of income coming in.  Proper expectations should be in line with how businesses turn a profit. Years 1 and 2 operate at a loss. Year 3 barely gets you into the black. Year 4 is when businesses start to become self sustaining.

Now do others succeed earlier? Absolutely.....those are the ones that drag the averages up.  In my 2nd full time year in the business I was in the top 1% of agents nation wide, and the top 1% of income earners.  How was I able to do this? I have a few very basic tips.

First, I had a lot of working capital. Im not going to sugar coat it, I had a considerable net worth before jumping into being an agent full time, with an expectation of spending $30-$40k per year on business overhead even with no money coming in.

Secondly, I tried to go to some no name brokerage to start, and after 6 months the only sales I had made were my own, so I switched gears. I joined the brokerage with the largest market share in my metro area, which at the time had a 19% market share....then I decided to join their office location of their top producing office on a per agent basis....and I decided just to copy every single thing the big hitters in that officer were doing.  Then pretty soon after that, I was one of those top hitters too.

Have working capital, copy those that are successful. 

@Josiah Richard I hear you in that...but as a dual career myself who is doing more full time real estate than my full time j.o.b. I would encourage you to hustle for the next year to see if you can save the necessary 6-13 mos for you, your business expenses, wife’s PhD program and general living. Benefits are a tough part to let go. I would recommend you get a coach. I am in my second year of coaching and I’m having my best year yet. Get hyper focused on tour goals and you and your wife should be aligned on them...and then kill it.

@Russell Brazil incredibly helpfully. Soon as I starting reading your response, I found myself surprised I didn’t think of it in that light before. When I want to make the move I will sit down with my mentors and makes sure (from a business plan model) that I have everything inline. Thank you!

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