Metro Detroit Real Estate Agents - Question for you all

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Metro Detroit Real Estate Agents - Question for you all

Aaron Yates
Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes

I have come to another cross road in my career as a robot programmer. My current job can not and has not been able to fund my real estate for 7 months now. I still can not acquire funding from any lenders.

So I am looking at my options. One option is to go back into the bodyshop side of the auto industry. This will get me back to having cash after a few months to fund my real estate purchases but at the sacrifice of traveling again 80% of the time and being away from my family.

Another option that I have been researching and asking locals about for some time now and that is to become a Real Estate Agent. My biggest concern is what a first year agent can truly make.

I know my ability and drive, but what I don't know is what the average income is for a new agent. I know many keep this to themselves so what I am asking is if someone can give me some advice on the best way to jump in and position myself to be more successful from the get go.

I would also like to get some income examples from some of you if you wouldn't mind PM'ing me with them so it's not out here in the public.

Thank you for any responses in advance.

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    12y

    Most agents make low low money. I believe something like 80% of agents do not continue past year one. I'd recommend you keep your job and become an agent. If your business as an agent does not pick up, you still have your job. If it does awesome then quit your job. Lenders would not count your commission as an agent until you did the job for 2 years.

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  • Aaron Yates
    OP
    Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
    12y
    Originally posted by @James Wise:
    Most agents make low low money. I believe something like 80% of agents do not continue past year one. I'd recommend you keep your job and become an agent. If your business as an agent does not pick up, you still have your job. If it does awesome then quit your job. Lenders would not count your commission as an agent until you did the job for 2 years.

    This is why it's a big decision. I can't keep my job and become an agent. It looks like I will have to switch companies which means I will be back to traveling 80% of the time, out of the state and sometimes even out of the country.

    I understand the tasks to becoming an agent and how much work it is. I just never get any straight answers about real first year income. I'm not looking for someone to hire me, just looking for information that seems to be near impossible to get. Maybe that's because so many people don't make it as an agent.

    Thank you for your response James.

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    12y

    Don't quote me on exact numbers but I believe it's something like 20% of 1st yr agents surpass the $1 million in sales mark..... $1 million in sales = $15,000-$20,000 in commission. Then you have your expenses. MLS dues etc.

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  • John Knappmann
    Landlord · Flat Rock, MI · Member since 2011 · 179 posts · 26 votes
    12y

    Aaron, a quick glance at Salary.com has the median salary for all real estate agents under $40k. Top 10% is under $60k. That's not starting. I believe in you, but it would not be a good job to replace the income you are making now.

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  • Aaron Yates
    OP
    Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
    12y
    Originally posted by @John Knappmann:
    Aaron, a quick glance at Salary.com has the median salary for all real estate agents under $40k. Top 10% is under $60k. That's not starting. I believe in you, but it would not be a good job to replace the income you are making now.

    Thanks John. This seems to be the general consensus. With these types of numbers and the responsibility I have with my family, I guess it's back to the traveling.

    Not only will this take me away from my family again, it takes me away from all the networking I have been able to do since last July as well as most likely missing the meetups that I started with Tom.

    The upside is big projects is how I fund my real estate. So it will help grow my portfolio in hopes to achieve my goal. Time to sacrifice again... Hopefully something happens by the end of the week and I won't be looking for a new company to work for.

    But all signs and verbal comments point in the direction of not being contracted to the current company I am at by the end of this week.

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  • Carson M.
    Investor · Ferndale, MI · Member since 2013 · 130 posts · 41 votes
    12y

    There was a recent article (2-3 weeks ago) in the WallStreet Journal about real estate agents. The gist was the top 2% are well off, a lot of the others do not do well. As previously noted, hitting 1 million in sales 15-20k, MLS is around 1K a year, and a recent agent I talked to said she has a $150/month desk fee to the company. She also said the industry is changing from 50/50 split to a 35/65 broker take majority split. The margins are small, especially if you are not working in top end cities like Bloomfield, Troy, GP. ANd, in those cities, I find there are a select few realtors that market themselves and monopolize those areas.

    Obviously, it is duable to become a successful agent, but very very hard and very rare. I believe it would be important to look at the realistic risk vs reward.

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  • Carson M.
    Investor · Ferndale, MI · Member since 2013 · 130 posts · 41 votes
    12y

    How are you thinking of structuring your deals for buy and hold with an investor? Equity or a given rate of return?

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  • Aaron Yates
    OP
    Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
    12y
    Originally posted by @Carson M.:
    How are you thinking of structuring your deals for buy and hold with an investor? Equity or a given rate of return?

    My initial thoughts with the people that have approached me over the past couple years was to split the cash flow because they weren't interested in being hands on but wanted long term cash flow. When time came to put the cash up, they were no where to be found.

    In the end they have all backed out once I find a deal. So now I take these inquiries with a grain of salt and don't put much thought into it anymore. Takes too much of my time to get things set up, look for a property, and find the deal just to have the person back out and I look like an idiot to my agent for wasting their time.

    But it would really depend on what an investor was interested in setting up with me on it and if the numbers make sense. Obviously a split wouldn't bring the same returns as I mention I get. But the people inquiring with me were either newbies or people just looking for a little extra cash flow.

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  • Joe Delia
    Involved In Real Estate · Rochester Hills, MI · Member since 2010 · 812 posts · 178 votes
    12y

    Aaron,

    Rarely do agents make money in their first year above poverty level. Finding something while being a part time agent to get the ball rolling is your best bet.

    0Reply
  • Aaron Yates
    OP
    Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
    12y
    Originally posted by @Joe Delia:
    Aaron,

    Rarely do agents make money in their first year above poverty level. Finding something while being a part time agent to get the ball rolling is your best bet.

    Thanks Joe. Im hearimg the same from everyone now. So its back to traveling 80%+ a year for work.

    Financially will be great and allow me to start buying again in the late spring. But the sacrifice is only seeing my family 4 to 5 days a month for the next 6 to 8 months.

    Thanks toneveryome for their responses.

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  • Joe Delia
    Involved In Real Estate · Rochester Hills, MI · Member since 2010 · 812 posts · 178 votes
    12y
    Originally posted by @Aaron Yates:
    Originally posted by @Joe Delia:
    Aaron,
    Rarely do agents make money in their first year above poverty level. Finding something while being a part time agent to get the ball rolling is your best bet.

    Thanks Joe. Im hearimg the same from everyone now. So its back to traveling 80%+ a year for work.

    Financially will be great and allow me to start buying again in the late spring. But the sacrifice is only seeing my family 4 to 5 days a month for the next 6 to 8 months.

    Thanks toneveryome for their responses.

    Good news is i'll pay all the fee's in the meantime and only charge you $249 (Brokerage fee) when you're ready to buy again! ;)

    0Reply
  • Aaron Yates
    OP
    Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
    12y
    Originally posted by @Joe Delia:
    Originally posted by @Aaron Yates:
    Originally posted by @Joe Delia:
    Aaron,
    Rarely do agents make money in their first year above poverty level. Finding something while being a part time agent to get the ball rolling is your best bet.

    Thanks Joe. Im hearimg the same from everyone now. So its back to traveling 80%+ a year for work.

    Financially will be great and allow me to start buying again in the late spring. But the sacrifice is only seeing my family 4 to 5 days a month for the next 6 to 8 months.

    Thanks toneveryome for their responses.

    Good news is i'll pay all the fee's in the meantime and only charge you $249 (Brokerage fee) when you're ready to buy again! ;)

    So you dont take any commission from the deal?

    0Reply
  • David O
    Investor · Detroit, MI · Member since 2012 · 119 posts · 64 votes
    12y

    I've been debating taking the test and becoming an agent. I would probably start part-time though and see if I like it. Ideally I'd like to have more passive income to cover me if I ever wanted to become a full-time agent. I also don't have a wife or kids though.

    0Reply
  • Joe Delia
    Involved In Real Estate · Rochester Hills, MI · Member since 2010 · 812 posts · 178 votes
    12y
    Originally posted by @Aaron Yates:
    Originally posted by @Joe Delia:
    Originally posted by @Aaron Yates:
    Originally posted by @Joe Delia:
    Aaron,
    Rarely do agents make money in their first year above poverty level. Finding something while being a part time agent to get the ball rolling is your best bet.

    Thanks Joe. Im hearimg the same from everyone now. So its back to traveling 80%+ a year for work.

    Financially will be great and allow me to start buying again in the late spring. But the sacrifice is only seeing my family 4 to 5 days a month for the next 6 to 8 months.

    Thanks toneveryome for their responses.

    Good news is i'll pay all the fee's in the meantime and only charge you $249 (Brokerage fee) when you're ready to buy again! ;)

    So you dont take any commission from the deal?

    Not from the buyer!

    0Reply
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