This can’t be right……. is it that easy to make money as a real estate agent?

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

@Mike Schorah You did a lot of research here and I applaud you for that.

Every coin has two sides. Which side do you prefer? Is wholesaling your full time job? I doubt there's even 100K motivated sellers in your market. I'd argue 95% of new agents start out working with the wrong clients. They're not great at judging client motivation. It goes both ways.

Personally we enjoy owning the assets these agents/wholesalers are selling. How much time are these agents spending to make an average commission of $4,641? It's WAY MORE time than we're spending self managing our rentals. Nothing wrong with being an agent but my point is you want to own the coin. How do you benefit from the wealth building pillars RE if you never own anything? My wife and I don't have time to sell RE so we leverage professionals to do it for us. We're small investors but building the launch pad to grow. Working a regular 9-5 job and establishing a "retirement" makes more sense. For the young, no kids, 25 y/o, looking for experience it could be a completely different mind set.

3 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

3y

If it is that easy, then just do it.

87% of people who try their hand at being an agent fail out of the business entirely. Median income for those that make it is $50k. Millions and millions and millions have people have tried to be real estate agents and failed.

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John Clark

Member since 2018 · 1k+ posts · 1k+ votes

3y

Quote from @Mike Schorah:

According to one website, “it takes about 12 hours of calling and 208 cold calls to achieve one listing, appointment, or referral, according to a study by the Keller Center at Baylor University. So if an agent’s average commission is $4,641, you get a return on investment of $386.75 per hour!

Which you know cannot be right, so why did you stop your research, and your analysis? The problem is you didn't analyze the appropriateness of the research and conclusions you were making.

The factoid you looked at said "hours of calling." So your analysis is right only if you ignore time spent meeting the seller, meeting the buyer, holding the buyer's hand while he gets financing, holding the seller's hand while he negotiates the contract, inspecting the house, finding comparable properties for prices, etc., etc.

Or did you think those things could be done instantaneously? Or perhaps that others would do them for you for free?

Factor in those hours and get back to us.

4 Reply

Jaron WallingPro Member

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

3y

What @John Clark said. It's a dump truck load of time. It's not easy selling RE given these market conditions.

1 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

3y

Being a Realtor cannot be measured by numbers like that.....

Of course when you start out, it is a tough road, but can be lucrative anyway if you are smart and stick at it.

But think down the road a few years...a lot of Realtors can then rely on repeat customers and referrals. That's when it can be very lucrative.

But still most people just don't have what it takes to do that job...a lot of sales, and most people just aren't comfortable doing that. I wasn't when I tried it...

4 Reply

Rocco MontanaPro Member

Real Estate Agent · Boulder, CO · Member since 2016 · 12 posts · 13 votes

3y

@Mike Schorah Here the deal, from an Investor turned agent that invests. I invested in Fortune builders with every penny my wife and I had at the time, and it was great and helped me learn A LOT about all types of real estate investing. I found a wholesale deal on Facebook and made 16k with 4 hours of work. Quit my $100k+/year job, with the support of my wife and my next deal didn't come for almost a year. I had no 401k, no trust fund, and i'm a confident networker and deal maker. I raised $1M+ in private money to do a few flips, made money, kept a couple, and lost $250k on two terrible projects in year 2, family money and CCs I should have sorted in the next 18 months. Fast Forward to year 6(now). I learned after TONS of resistance the conduit of opportunity went from being a real estate agent to being an investor and not the other way around(for me). If you have a few thousand dollars to invest in marketing, online, mailers, leave behinds, events etc. Say $3k/month, you SHOULD see an ROI in 6 months or less as a wholesaler OR Real Estate Agent. Truth is 95% of real estate agents DO SUCK, but the ones that have experience investing, can provide options and creative deal structures will far surpass those that dont. Either one takes work, but the highest reward compared to risk is beaing an agent. This may depend on your market, My personal average sale price is almost $800k in Colorado, even at 2.5% My commission checks average is almost $20k.

Is It EASY to make money as an agent, I say, in line with your (accurate) judgement that most are lazy and unmotivated, if you put in a mediocre amount of effort you will be WELL above average agent. Care about the solution for your customer, regardless of which hat you wear, and you'll be successful. That....and Follow Up!!

6 Reply

Paul De Luca

Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes

3y

Quote from @Mike Schorah:

I always saw what the Bureau of Labor Statistics said about real estate agents. For instance, the newest stat for real estate agents is that the median salary is $49k (https://www.bls.gov/ooh/sales/home.htm).

I spent the last year making 100,000 cold calls, putting 1,000 sticky notes on doors, following up with 100 leads a week, and knocking on dozens of doors……. all to make $12k in wholesaling, although I have leads that I’ve been following up with since last year and scaling a wholesaling business is simplified.

Over the months, I’ve seen some come on the wholesaling forum and try to persuade me into a career as a realtor and I’ve seen in my area wholesalers with license that do both listings and wholesale deals.

I got curious last night and did some research.

According to one website, “it takes about 12 hours of calling and 208 cold calls to achieve one listing, appointment, or referral, according to a study by the Keller Center at Baylor University. So if an agent’s average commission is $4,641, you get a return on investment of $386.75 per hour!

The same study also found that if you spend 15 hours a week making calls, you can increase your commission to nearly $300k. However, most agents get burnt out from being on the phone for so long, and most aren’t willing to make that effort. Finding success at cold calling is a long-term game that requires patience and determination.” (https://www.kylehandy.com/blog/learn/real-estate-cold-calling/#:~:text=Cold%20calling%20has%20long%20been,clients%20using%20this%20traditional%20method.)

So if I made 100,000 cold calls as an agent and not a wholesaler, then I would have $256k in commissions?!?!?!?

Someone please clarify. Although wholesaling seems more exciting, I feel like a complete idiot if my disdain for real estate agents is due to what seems to be the fact that 95% are lazy and terrified of rejection.

Going on a listing appointment is not the same thing as getting the listing and successfully selling that listing.

I'm no wholesaling expert, but it sounds like you have a conversion problem on your hands. Based on your numbers, you averaged 278 calls/day everyday for the entire year (8334/mo).

1 Reply

Scott TrenchPro Member

Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes

3y

Quote from @Mike Schorah:

I always saw what the Bureau of Labor Statistics said about real estate agents. For instance, the newest stat for real estate agents is that the median salary is $49k (https://www.bls.gov/ooh/sales/home.htm).

I spent the last year making 100,000 cold calls, putting 1,000 sticky notes on doors, following up with 100 leads a week, and knocking on dozens of doors……. all to make $12k in wholesaling, although I have leads that I’ve been following up with since last year and scaling a wholesaling business is simplified.

Over the months, I’ve seen some come on the wholesaling forum and try to persuade me into a career as a realtor and I’ve seen in my area wholesalers with license that do both listings and wholesale deals.

I got curious last night and did some research.

According to one website, “it takes about 12 hours of calling and 208 cold calls to achieve one listing, appointment, or referral, according to a study by the Keller Center at Baylor University. So if an agent’s average commission is $4,641, you get a return on investment of $386.75 per hour!

The same study also found that if you spend 15 hours a week making calls, you can increase your commission to nearly $300k. However, most agents get burnt out from being on the phone for so long, and most aren’t willing to make that effort. Finding success at cold calling is a long-term game that requires patience and determination.” (https://www.kylehandy.com/blog/learn/real-estate-cold-calling/#:~:text=Cold%20calling%20has%20long%20been,clients%20using%20this%20traditional%20method.)

So if I made 100,000 cold calls as an agent and not a wholesaler, then I would have $256k in commissions?!?!?!?

Someone please clarify. Although wholesaling seems more exciting, I feel like a complete idiot if my disdain for real estate agents is due to what seems to be the fact that 95% are lazy and terrified of rejection.

Neither is "easy" - but I do continuously wonder why someone would think going into wholesaling is a better place to start a re career than becoming a licensed agent, when the barrier to entry is so low, and upside to being an agent is so high, relatively speaking. In order to achieve a $10K spread on a wholesale deal, so much has to go right, the seller has to be in a real predicament, and the deal has to be excellent for an investor.

For a $10K commission to be earned on a deal, a deal has to be "business as usual" (or more realistically, a slightly below average deal has to be done) for an agent.

I have to imagine that to make an equal income, the typical wholesaler has to work WAY harder than the typical agent. But, that's coming from the perspective of an industry observer, not a boots on the ground operator. Sure many successful wholesalers would disagree.

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4 Reply

Mike Schorah

OP

Rental Property Investor · Member since 2021 · 423 posts · 190 votes

3y

@Jaron Walling @Russell Brazil @Bruce Woodruff @Rocco Montana @Scott Trench

Thank you all for your responses.

I guess my main issue is that with wholesaling, after you get the hang of in-person, you can go virtual and do it ANYWHERE (https://www.biggerpockets.com/forums/93/topics/603833-quit-my-job-and-plan-to-wholesale#:~:text=Just%20know%20that%20wholesaling%20is,it%20works%20out%20for%20you.&text=Thank%20you%20all!). With being a realtor, it seems like you’re stuck to the same location (like it sounds with what @Bruce Woodruff is saying).

87% failure rate for agents is close to the 95% failure rate for wholesalers. So why switch now when I’m so close to getting it? Why learn a whole new skillset? I have 50-100 leads that I’m consistently following up with. I have a lead from last year where we already worked out the price and they’re just not ready yet and other leads from last year and leads that I acquired this year. I have 5-10 people that I consistently follow up with who tell me they’re not ready yet and to call next month or 3 months later or whatever. Many contacts with these same follow-ups that sound very interested. The deal I had in January flew off the shelf. I just need to get closer until I have momentum and gain the skills and knowledge I need. And dump all of my earnings back into the business. Either way, I’m not giving up. I’m enjoying the process.

My other issue with being an agent is scaling up. Not sure how it works, but there is a clear path with wholesaling… hire a VA. Then start building up direct mail. How would you build up a brokerage without being there in person to manage it? Seems like it would require a lot of overhead where with wholesaling, everything can be done remote.

Definitely want to figure out *how* to do it before I start spending a lot of money… (https://www.biggerpockets.com/forums/93/topics/1108084-large...)

1 Reply

Scott TrenchPro Member

Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes

3y

I know many agents who have built successful teams to scale their businesses.

For example, @Craig Curelop has a team called the FI team. He has many successful agents working on his team, who have thriving careers, and he makes money on every deal. He works as an advisor, helps folks with their strategies, and then members of his team often help the clients actually go on to make their investment/house-hack/home purchases. He does this remotely from Idaho, with operations in multiple cities, and has happy employees, customers, etc. I have been a client of him and his team in the past personally.

This is the case for many teams around the country.

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0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

3y

Quote from @Bruce Woodruff:

Being a Realtor cannot be measured by numbers like that.....

Of course when you start out, it is a tough road, but can be lucrative anyway if you are smart and stick at it.

But think down the road a few years...a lot of Realtors can then rely on repeat customers and referrals. That's when it can be very lucrative.

But still most people just don't have what it takes to do that job...a lot of sales, and most people just aren't comfortable doing that. I wasn't when I tried it...

YUP my wife ( I will brag) was number one out of 600 agents in her firm in 2021. All while spending not one dime on marketing and not one minute on the phone cold calling.. it is all relationship and referrals.. this is the reward for putting in the hard work being a single mom with 3 kids when she started in the business in the late 80s. Just like building a RE portfolio it takes time. But gets better as time goes on.

Myself I started at 18 and made 50k in 1975 my first year in the business.. I identified a niche and went for it.. Was a top producer for many years. Where it became life changing for me personally was all the contacts I made then leveraged.. Its where i learned how HML worked and how I came to own a HML company and many many more contacts over the years.. I have not sold RE at the street level since the late 2000s but even then in those later years it was all referrals and just added to my lending and development business that I got into because of being a Broker and all the contacts I made over the years.

Thats the main issue i see with wholesaling your NOT creating contacts Maybe buyers lists but those dont do you any good if you cant get the sellers.. And your dealing with one and done sellers.. you go to all that effort you sell their one beat up home to some investor and your done you have to find another seller.. As an agent your building your clientele base.. List a home for them sell them another so on and so forth.. like any industry you have winners and losers. some of it is hard work and such.. Others are intangibles like salesmen ship.. that was my strength I learned from some of the best land salesmen on the planted and learned how to close.. thats the key.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

3y

Quote from @Mike Schorah:

@Jaron Walling @Russell Brazil @Bruce Woodruff @Rocco Montana @Scott Trench

Thank you all for your responses.

I guess my main issue is that with wholesaling, after you get the hang of in-person, you can go virtual and do it ANYWHERE (https://www.biggerpockets.com/forums/93/topics/603833-quit-my-job-and-plan-to-wholesale#:~:text=Just%20know%20that%20wholesaling%20is,it%20works%20out%20for%20you.&text=Thank%20you%20all!). With being a realtor, it seems like you’re stuck to the same location (like it sounds with what @Bruce Woodruff is saying).

87% failure rate for agents is close to the 95% failure rate for wholesalers. So why switch now when I’m so close to getting it? Why learn a whole new skillset? I have 50-100 leads that I’m consistently following up with. I have a lead from last year where we already worked out the price and they’re just not ready yet and other leads from last year and leads that I acquired this year. I have 5-10 people that I consistently follow up with who tell me they’re not ready yet and to call next month or 3 months later or whatever. Many contacts with these same follow-ups that sound very interested. The deal I had in January flew off the shelf. I just need to get closer until I have momentum and gain the skills and knowledge I need. And dump all of my earnings back into the business. Either way, I’m not giving up. I’m enjoying the process.

My other issue with being an agent is scaling up. Not sure how it works, but there is a clear path with wholesaling… hire a VA. Then start building up direct mail. How would you build up a brokerage without being there in person to manage it? Seems like it would require a lot of overhead where with wholesaling, everything can be done remote.

Definitely want to figure out *how* to do it before I start spending a lot of money… (https://www.biggerpockets.com/forums/93/topics/1108084-large...)

the other issue with wholesaling is your only working a very small niche of the market. beat up houses that need to be sold for cash most of the time.. there are only so many buyers for those.

Scott makes a great point about the TEAMS any one ask's me when they are starting out that's the route to take get on a team and earn while your learn. I know many agents that are now on their own successful and started on a team.. Its not a new concept the team.. Martin Levy in Sonoma CA had his team going in the 80s and he just flat killed it.

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1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

3y

Quote from @Scott Trench:

Quote from @Mike Schorah:

I always saw what the Bureau of Labor Statistics said about real estate agents. For instance, the newest stat for real estate agents is that the median salary is $49k (https://www.bls.gov/ooh/sales/home.htm).

I spent the last year making 100,000 cold calls, putting 1,000 sticky notes on doors, following up with 100 leads a week, and knocking on dozens of doors……. all to make $12k in wholesaling, although I have leads that I’ve been following up with since last year and scaling a wholesaling business is simplified.

Over the months, I’ve seen some come on the wholesaling forum and try to persuade me into a career as a realtor and I’ve seen in my area wholesalers with license that do both listings and wholesale deals.

I got curious last night and did some research.

According to one website, “it takes about 12 hours of calling and 208 cold calls to achieve one listing, appointment, or referral, according to a study by the Keller Center at Baylor University. So if an agent’s average commission is $4,641, you get a return on investment of $386.75 per hour!

The same study also found that if you spend 15 hours a week making calls, you can increase your commission to nearly $300k. However, most agents get burnt out from being on the phone for so long, and most aren’t willing to make that effort. Finding success at cold calling is a long-term game that requires patience and determination.” (https://www.kylehandy.com/blog/learn/real-estate-cold-calling/#:~:text=Cold%20calling%20has%20long%20been,clients%20using%20this%20traditional%20method.)

So if I made 100,000 cold calls as an agent and not a wholesaler, then I would have $256k in commissions?!?!?!?

Someone please clarify. Although wholesaling seems more exciting, I feel like a complete idiot if my disdain for real estate agents is due to what seems to be the fact that 95% are lazy and terrified of rejection.

Neither is "easy" - but I do continuously wonder why someone would think going into wholesaling is a better place to start a re career than becoming a licensed agent, when the barrier to entry is so low, and upside to being an agent is so high, relatively speaking. In order to achieve a $10K spread on a wholesale deal, so much has to go right, the seller has to be in a real predicament, and the deal has to be excellent for an investor.

For a $10K commission to be earned on a deal, a deal has to be "business as usual" (or more realistically, a slightly below average deal has to be done) for an agent.

I have to imagine that to make an equal income, the typical wholesaler has to work WAY harder than the typical agent. But, that's coming from the perspective of an industry observer, not a boots on the ground operator. Sure many successful wholesalers would disagree.

Scott I suspect there is 100 to 1 or probably 1000 to one ratio of Agents over wholesalers that make over 250k per year NET> I deal with wholesalers every day in my lending world. Each market has a few top dogs and then a bunch of folks like the OP who try hard but make very little actual net income. I know for a fact if an agent put in the effort described above for a year they would make far more than 14k and would be building a monster referral base they can market for years to come.
And if you put this time into commercial real estate ( those buys / gals do cold call) returns could be even higher.

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1 Reply

Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

3y

The drop out rate in our industry is insane. Everyone wants to become an agent, about 85% drop out within the first year. Of the remaining another 80% drop out after the second year. And while the average income is low, the top 1% make over 500k a year and 7 figures are possible with a team.

Teams are the way to go anyway. Better process, better for clients, better for agents. It shortens the learning curve, you have multiple agents available to service a client, deeper knowledge, more support - and as an agent you can actually go on vacation and know your clients are taken care of by the team.

Typing this at a lake house with family ;-)

3 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

3y

Quote from @Marcus Auerbach:

The drop out rate in our industry is insane. Everyone wants to become an agent, about 85% drop out within the first year. Of the remaining another 80% drop out after the second year. And while the average income is low, the top 1% make over 500k a year and 7 figures are possible with a team.

Teams are the way to go anyway. Better process, better for clients, better for agents. It shortens the learning curve, you have multiple agents available to service a client, deeper knowledge, more support - and as an agent you can actually go on vacation and know your clients are taken care of by the team.

Typing this at a lake house with family ;-)

you can build a team with wholesaling the major difference though is the building of the team is with folks that need to get paid regularly. So your adding fixed overhead to your operation. where as with the RE teams the agents working on the team are still working by commission and get paid for results. Unless there are team owners out there paying a salary I am not aware of any of those but maybe ??

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1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

3y

Quote from @Scott Trench:

Quote from @Mike Schorah:

I always saw what the Bureau of Labor Statistics said about real estate agents. For instance, the newest stat for real estate agents is that the median salary is $49k (https://www.bls.gov/ooh/sales/home.htm).

I spent the last year making 100,000 cold calls, putting 1,000 sticky notes on doors, following up with 100 leads a week, and knocking on dozens of doors……. all to make $12k in wholesaling, although I have leads that I’ve been following up with since last year and scaling a wholesaling business is simplified.

Over the months, I’ve seen some come on the wholesaling forum and try to persuade me into a career as a realtor and I’ve seen in my area wholesalers with license that do both listings and wholesale deals.

I got curious last night and did some research.

According to one website, “it takes about 12 hours of calling and 208 cold calls to achieve one listing, appointment, or referral, according to a study by the Keller Center at Baylor University. So if an agent’s average commission is $4,641, you get a return on investment of $386.75 per hour!

The same study also found that if you spend 15 hours a week making calls, you can increase your commission to nearly $300k. However, most agents get burnt out from being on the phone for so long, and most aren’t willing to make that effort. Finding success at cold calling is a long-term game that requires patience and determination.” (https://www.kylehandy.com/blog/learn/real-estate-cold-calling/#:~:text=Cold%20calling%20has%20long%20been,clients%20using%20this%20traditional%20method.)

So if I made 100,000 cold calls as an agent and not a wholesaler, then I would have $256k in commissions?!?!?!?

Someone please clarify. Although wholesaling seems more exciting, I feel like a complete idiot if my disdain for real estate agents is due to what seems to be the fact that 95% are lazy and terrified of rejection.

Neither is "easy" - but I do continuously wonder why someone would think going into wholesaling is a better place to start a re career than becoming a licensed agent, when the barrier to entry is so low, and upside to being an agent is so high, relatively speaking. In order to achieve a $10K spread on a wholesale deal, so much has to go right, the seller has to be in a real predicament, and the deal has to be excellent for an investor.

For a $10K commission to be earned on a deal, a deal has to be "business as usual" (or more realistically, a slightly below average deal has to be done) for an agent.

I have to imagine that to make an equal income, the typical wholesaler has to work WAY harder than the typical agent. But, that's coming from the perspective of an industry observer, not a boots on the ground operator. Sure many successful wholesalers would disagree.

https://www.biggerpockets.com/forums/927/topics/1133212-my-f... read this post by an agent in their first year and signing up to be a BP preferred agent .. and compare that with what your experiencing. Leverage BP its a gold mine. just sayin. !

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0 Reply

Lucia Rushton

Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes

3y

@Mike Schorah I think one of the differences is, do you want to be of service? Being a Realtor can be a very profitable business, but also, you are being of service to others. My experience of wholesalers is it’s only about the money, a quick buck. Just something to think about, maybe. As always just my opinion.

2 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

3y

And I'll just throw this out there (no offense to anyone) but wholesaling has a negative connotation. Realtors not so much, although we all know the bad Realtors out there. But a good Realtor is worth their weight in gold....

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

3y

Quote from @Bruce Woodruff:

And I'll just throw this out there (no offense to anyone) but wholesaling has a negative connotation. Realtors not so much, although we all know the bad Realtors out there. But a good Realtor is worth their weight in gold....

I will give you one scenario.. I brokered a 100 unit apartment in 2005 to a client from Hawaii. 5 mil 100k fee to me. we became friends. they have a condo in Hawaii that is never used . we use it two times a year for the last 18 years for no cost but I treat for nice dinners of course.. We have gone on to build about 45 new builds together ( me doing the work him as investor) plus probably 70 HML for him and his IRA.. U cant create those kind of contacts and relationships as a wholesaler. on the houses alone we each made well over 2 million in net net profit. so relationships that last decades are made and future and additional business opportunities.

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3 Reply

Marian Huish

Real Estate Broker · DC MD, VA & NV · Member since 2014 · 512 posts · 292 votes

3y

Being a Realtor is about much more than cold callig @Mike Schorah, as many have already pointed out. Also, while selling real estate is largely local, it is possible to be a virtual realtor and scale your business not only nationally but internationally. I have done so and have proven that it’s possible to scale virtually without having an official ‘team’ that I am responsible for managing and compensating. I have sponsored 36 agents in 10 different states and the company actually compensates ME for doing so! Each time those agents have a sale, I get paid, much as a broker does but without either the responsibility or liability. And after 20+ years of experience, I am well positioned to support those agents by sending leads, etc. regardless of where I am licensed. It’s actually a brilliant business model that many have’poo-pood’ as an MLM. I believe it’s much better than building a team, training them only to have them leave and become your competition! eXp Realty also allows wholesaling, depending on which state you operate in. Well worth looking into… All the best.

5 Reply

Account Closed

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

3y

Quote from @Mike Schorah:

I always saw what the Bureau of Labor Statistics said about real estate agents. For instance, the newest stat for real estate agents is that the median salary is $49k (https://www.bls.gov/ooh/sales/home.htm).

I spent the last year making 100,000 cold calls, putting 1,000 sticky notes on doors, following up with 100 leads a week, and knocking on dozens of doors……. all to make $12k in wholesaling, although I have leads that I’ve been following up with since last year and scaling a wholesaling business is simplified.

Over the months, I’ve seen some come on the wholesaling forum and try to persuade me into a career as a realtor and I’ve seen in my area wholesalers with license that do both listings and wholesale deals.

I got curious last night and did some research.

According to one website, “it takes about 12 hours of calling and 208 cold calls to achieve one listing, appointment, or referral, according to a study by the Keller Center at Baylor University. So if an agent’s average commission is $4,641, you get a return on investment of $386.75 per hour!

The same study also found that if you spend 15 hours a week making calls, you can increase your commission to nearly $300k. However, most agents get burnt out from being on the phone for so long, and most aren’t willing to make that effort. Finding success at cold calling is a long-term game that requires patience and determination.” (https://www.kylehandy.com/blog/learn/real-estate-cold-calling/#:~:text=Cold%20calling%20has%20long%20been,clients%20using%20this%20traditional%20method.)

So if I made 100,000 cold calls as an agent and not a wholesaler, then I would have $256k in commissions?!?!?!?

Someone please clarify. Although wholesaling seems more exciting, I feel like a complete idiot if my disdain for real estate agents is due to what seems to be the fact that 95% are lazy and terrified of rejection.

So, how much did you pay a guru to teach you wholesaling?

Wholesaling, real estate agent, falafels, it's all about selling skills. The words you use, the way you approach your buyer/seller, doing follow ups, learning to handle objections and learning 70 ways to close. A very successful real estate agent, a long time ago, wrote "How to Master the Art of Selling Anything" by Tom Hopkins. Things haven't changed. Selling skills are still needed and they are learned. It isn't just about cold calling.

Although I buy into the fact that an agent (I am not one) has the advantage of long term relationships that bring residuals over the years.

When I first started out, I got frustrated with real estate agents who wouldn't present my offers, so I simply do it myself. Since I buy off market and hang on to my properties, it's worked pretty well for me.

But, wholesaling is a "one and done", lots of effort and high tax rate, then you get to do it all over again.

I can count 6 major wholesalers in Phoenix (why Phoenix I'm not sure, I suppose because the crash was so bad they had a lot of inventory to work with) Each of the major 6 state that they spend $50,000 to $100,000 a month in marketing and advertising. Obviously they are doing very well. They advertise nationally. A few have training rograms that people pay a lot of money for and by their admission, 90% will never do a deal.

In the Alaska gold rush, more people in Seattle got rich selling to the hopeful prospectors, than the prospectors ever made.

3 Reply

Julien J.

Investor · CO · Member since 2016 · 757 posts · 1k+ votes

3y

Reporting on revenue is 1/2 the picture.

Cut revenue in half to account for expenses will get you a better estimate on the take home.

Then apply hours works and the per hour isn't great.

1 Reply

Justin Moy

Investor · Kansas City, MO · Member since 2020 · 400 posts · 278 votes

3y

When I got into the realtor game 11 years ago it was the most failed business in the country, although many people go into it part time or not really looking to make a real business out of it.

It's a simple business, but not easy.

You're an independent contractor, so if you're making $49k you're much better off getting a regular job because you still have to pay your taxes and your own benefits, insurance, realtor fees, and possibly for staff. Also any retirement options you want to contribute into.

Every market is different, I was in the bay area and my average sale price was $2.2M, it definitely took more than 12 hours of cold calling to break through. But if you're selling $100k homes I could see it going much quicker.

1 Reply

Crystal SmithPro Member

Moderator

Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes

3y

Quote from @Mike Schorah:

I always saw what the Bureau of Labor Statistics said about real estate agents. For instance, the newest stat for real estate agents is that the median salary is $49k (https://www.bls.gov/ooh/sales/home.htm).

I spent the last year making 100,000 cold calls, putting 1,000 sticky notes on doors, following up with 100 leads a week, and knocking on dozens of doors……. all to make $12k in wholesaling, although I have leads that I’ve been following up with since last year and scaling a wholesaling business is simplified.

Over the months, I’ve seen some come on the wholesaling forum and try to persuade me into a career as a realtor and I’ve seen in my area wholesalers with license that do both listings and wholesale deals.

I got curious last night and did some research.

According to one website, “it takes about 12 hours of calling and 208 cold calls to achieve one listing, appointment, or referral, according to a study by the Keller Center at Baylor University. So if an agent’s average commission is $4,641, you get a return on investment of $386.75 per hour!

The same study also found that if you spend 15 hours a week making calls, you can increase your commission to nearly $300k. However, most agents get burnt out from being on the phone for so long, and most aren’t willing to make that effort. Finding success at cold calling is a long-term game that requires patience and determination.” (https://www.kylehandy.com/blog/learn/real-estate-cold-calling/#:~:text=Cold%20calling%20has%20long%20been,clients%20using%20this%20traditional%20method.)

So if I made 100,000 cold calls as an agent and not a wholesaler, then I would have $256k in commissions?!?!?!?

Someone please clarify. Although wholesaling seems more exciting, I feel like a complete idiot if my disdain for real estate agents is due to what seems to be the fact that 95% are lazy and terrified of rejection.

Honestly, if you're setting up a business to wholesale then you may as well consider getting licensed. It's not mandatory but should be considered. Why? Before long most states will have laws in place, similar to Illinois, that will mandate a license to "wholesale". The law in Illinois is one assignment deal per year without a license. Do more than that and get caught & the fine will be bigger than your wholesale fee. The large companies that we have purchased wholesale deals from, like New Western, are licensed. Granted they have big backers and lots of cash but....

So what's the benefit of having a license? You'll have multiple options to present someone that you have called. If they aren't interested in your offer as a wholesaler, then maybe it's a prospect that would work out better as a listing.

312-681-7487

2 Reply

This can’t be right……. is it that easy to make money as a real estate agent?

This can’t be right……. is it that easy to make money as a real estate agent?

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