Where's the Money in Being An Agent?
Most Popular Reply
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11yThe reality is no matter the profession chosen the strong not only survive but thrive to heights not reached by many. Decide what you are passionate about taking the money out of the equation and make the decision to be the best at it.
Most people in life are just mediocre. Mediocre eeks you out a living. Mediocre makes you just a number. Mediocre let's you set low goals and not challenge yourself to see what REALLY is possible.
Being mediocre is a CHOICE. Most people see the success but they do not see the hard work behind the success. They want a quick buck with little effort. Some of the greatest achievers I have read about in books and watched documentaries on failed and fell flat on their face many times. They never gave up. It is tough. You will be challenged everyday to get better.
74 Replies
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Brandon Uehlein:
Work, work, work! Real estate is a 24/7 job. A lot of people try to only work a few days a week and that does not cut it. Marketing is key. Get your name out there! Property management is a great aspect to consider if the market is right. Think, some people want to buy 10+ rental properties! Good luck to you and your future endevors.
I think so many fail because they get so excited about the prospect of flexibility in their schedule that they forget they have to put in the work as well. Flexibility comes later after your business is established and you find out what works. Thank you so much! To you as well!
Johnny Lujan
- Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes11y
The PM business is great, and I manage about 60 properties. I have one other agent who works with me now so I can grow the business some more, and she's doing fantastically. I'm looking forward to the coming years to see where we go!
- 11yColin SmithBusiness MemberRealtor · Colorado Springs, CO · Member since 2013 · 987 posts · 447 votes
Johnny,
I am an agent in Colorado Springs that got my license last August. My experience so far is that it is really tough!!! Trying to find new clients that are actually looking to buy and not just playing with the idea is tough. Listings are even harder to come by as they are very competitive.
Also, you may be interested to know that the average Realtor in the PPAR region, which includes springs, closed 5 transactions last year. That is not even enough to live on. there are also over 2000 agents in El Paso County alone. Cherry Creek Properties where I broker with the average agent closed 10 transactions... that still isn't really enough to support much. So just be ready to work 24 hours a day, 7 days a week. If you do pull the trigger on it, check out Cherry Creek Properties. When I was searching for a brokerage, they had the smallest commission split by far.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes11y
I can tell you when I first started out about 12 years ago it was very tough. Some days you felt like what am I doing?? Is it really this hard??
You reach a point where you either quit and give up on the dream or you say I am not going to listen to the naysayers and I am going to learn and outwork everyone else to make it happen.
It will be a roller coaster in the beginning where you are building a business from the ground up. Super highs and lower low's. I remember the days when I thought getting a 20k or 30k commission check was the pinnacle. Now I average six figures a deal.
I haven't had a 1 million commission check but I want to do that eventually. I will frame that one for sure when it happens. I tried residential when I started out and didn't like it. Lot's of weekends and nights and first time home buyers because you are not established yet. That comes with high splits to the broker while getting trained and low price points with the buyers you are working with. That makes for having to do a ton of volume just to keep the business going the first year.
95% WILL FAIL the first year in the business. I can tell you when you become the 5% it feels awesome that you are doing something not many people can do successfully long term.
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Dawn Brenengen:
The PM business is great, and I manage about 60 properties. I have one other agent who works with me now so I can grow the business some more, and she's doing fantastically. I'm looking forward to the coming years to see where we go!
That's great! Seems like a good business to get into for sure! Deal with some crazy people I imagine but rewarding nonetheless!
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Colin Smith:
Johnny,
I am an agent in Colorado Springs that got my license last August. My experience so far is that it is really tough!!! Trying to find new clients that are actually looking to buy and not just playing with the idea is tough. Listings are even harder to come by as they are very competitive.
Also, you may be interested to know that the average Realtor in the PPAR region, which includes springs, closed 5 transactions last year. That is not even enough to live on. there are also over 2000 agents in El Paso County alone. Cherry Creek Properties where I broker with the average agent closed 10 transactions... that still isn't really enough to support much. So just be ready to work 24 hours a day, 7 days a week. If you do pull the trigger on it, check out Cherry Creek Properties. When I was searching for a brokerage, they had the smallest commission split by far.
I'm so glad you chimed in! Nice to know what it's like in the Springs from a somewhat newer agent! That's amazing 2000?! Wow that's some crazy competition. So glad you gave me this insight, making me think twice about the business for sure. Thank you!
Johnny
- 11yColin SmithBusiness MemberRealtor · Colorado Springs, CO · Member since 2013 · 987 posts · 447 votes
While I do say over 2000, please know I am not sure if that includes people who are licensed but inactive. That was just a stat PPAR threw out at me once when I was just starting.
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Joel Owens:
I can tell you when I first started out about 12 years ago it was very tough. Some days you felt like what am I doing?? Is it really this hard??
You reach a point where you either quit and give up on the dream or you say I am not going to listen to the naysayers and I am going to learn and outwork everyone else to make it happen.
It will be a roller coaster in the beginning where you are building a business from the ground up. Super highs and lower low's. I remember the days when I thought getting a 20k or 30k commission check was the pinnacle. Now I average six figures a deal.
I haven't had a 1 million commission check but I want to do that eventually. I will frame that one for sure when it happens. I tried residential when I started out and didn't like it. Lot's of weekends and nights and first time home buyers because you are not established yet. That comes with high splits to the broker while getting trained and low price points with the buyers you are working with. That makes for having to do a ton of volume just to keep the business going the first year.
95% WILL FAIL the first year in the business. I can tell you when you become the 5% it feels awesome that you are doing something not many people can do successfully long term.
All of the points you have made have really made me think twice about everything. I know the work will be hard but is the payoff there? I don't know. Working 24/7 doing residential doesn't seem worth it. Plus the volume you would have to produce. I enjoy real estate a lot. Mostly investing, but I need to find a career to Build up cash so I can invest. Being an agent seemed like the best thing, but after hearing all these thoughts it doesn't seem like it. Commercial does definitely sound better however.
- Professional · Austin, TX · Member since 2015 · 10 posts · 0 votes11y
@Johnny L. Stay motivated and tell EVERYONE you meet you are in real estate. I'm somewhat newer agent and I'll tell you from first hand experience it is not easy or cheap to get started. I work with a brokerage that assigns mentors and has great training for new agents to get started. Although training and mentors are great nothing is given to you, you need to hit the streets and make it happen! I work in Los Angeles where there is a lot of competition but on the flip side when I do close a deal it pays off well. I've been an agent for going on two years and have already seen a huge percent of agents get started and quit before they even close a deal. Being an agent is not a part time job if you want to be successful especially in the very beginning. Door knocking, social media and open houses are great free ways that will get you started in your marketing.
- Investor · Arlington, VA · Member since 2014 · 151 posts · 37 votes11y
I dont have a license, but I know people that do.
I know someone who sold 113 houses last year. And that was his first year as an agent. We live in an area where the avg home prices are $500k, so you can do the math.
The ones who are barely scraping by, just simply aren't putting in the right work such as marketing.
- Investor · Dallas, TX · Member since 2013 · 619 posts · 128 votes11y
Keep in mind the market is hot hot hot right now what will you do when it goes soft???
- Wayne, NJ · Member since 2014 · 9 posts · 2 votes11y
This motivates me to get my license. Signing up for a weekend course as we speak.
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Michael Fucciani:
@Johnny L. Stay motivated and tell EVERYONE you meet you are in real estate. I'm somewhat newer agent and I'll tell you from first hand experience it is not easy or cheap to get started. I work with a brokerage that assigns mentors and has great training for new agents to get started. Although training and mentors are great nothing is given to you, you need to hit the streets and make it happen! I work in Los Angeles where there is a lot of competition but on the flip side when I do close a deal it pays off well. I've been an agent for going on two years and have already seen a huge percent of agents get started and quit before they even close a deal. Being an agent is not a part time job if you want to be successful especially in the very beginning. Door knocking, social media and open houses are great free ways that will get you started in your marketing.
Great advice! That's amazing that in just two years you have already seen so many agents come and go. Great tips on marketing. Definitely plan on doing a lot of open houses especially! Thanks Michael!
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Gautam Venkatesan:
Keep in mind the market is hot hot hot right now what will you do when it goes soft???
Great question I'm wondering the same thing!
- Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes11y
@Johnny Lujan,
My answer would be live off of the cash flow from your rental properties.
Johnny, here are some of the books I have read before going full time into this business.
Some of the best books that I have read that has influenced me to grow as a full time real estate broker are not all within the real estate industry. Personally for me, most of the "How to become a successful retail real estate agent books" did not resonate well with me by authors like Darryl Davis and Dirk Zeller. Their technique teaches you how to cold call on FSBOs and Expires, and felt more like a used car salesman book without much use of your brains.
The books that have resonated with me the most and had influenced the way I think as a broker are the books related to top producers in the financial services and commercial real estate, not retail residential agent books.
These are the books that had the greatest personal influence on me as I started my brokerage in the northern suburbs of Atlanta.
1) The Million dollar Financial advisor and Financial Services Pratice - Mullen
2) Confessions of a real estate entrepreneur - James A. Randel JD and commercial broker.
3) The Entrepreneur Mind - Kevin D Johnson
4) How to Succeed in Commercial Real Estate - John L Bowman
5) REAL : a path to passion, purpose, and profits in real estate - Dave Crumby (excellent)
6) 6 steps to 7 figures - Pat Hiban
7) 21 Things I wish my broker had told me - Frank Cook
8) Commercial Real Estate Brokers who Dominate - Rod Santomassimo
I realized early in my real estate career, that I did not want to become a retail broker, but an investment broker. As a investment broker, you need to develop specialized knowledge and serve your clients in real estate investing, taxation, depreciation, property management, financing, and exchanging. Also by having in-depth understanding of economics and macro economic trends will put you ahead of 95% of investors.
Originally posted by @Johnny L.:Originally posted by @Gautam Venkatesan:
Keep in mind the market is hot hot hot right now what will you do when it goes soft???
Great question I'm wondering the same thing!
- Investor · Austin, TX · Member since 2011 · 155 posts · 23 votes11y
Johnny
I believe the hard part is developing an effective system and evolving it to make it better. Once you have a system that works it takes consistency and persistence. Consistency and persistence are not easy for all but is what I know to be some of the key factors to success.
Giving yourself the option to close deals in a multitude of ways is very smart, but it wont be nearly as effective if you don't get many leads coming your way.
- Real Estate Agent · Philadelphia, PA · Member since 2013 · 150 posts · 59 votes11y
Hey @Johnny L.,
Great question. I'm in Philadelphia, and I'm a full time realtor. I've been a realtor for about years and it's been anything but easy. However, the money is there. My company is different in that I get to keep 100$ of my commission, I just pay $65 monthly. So that helps and I did that for a reason.
So here's how it breaks down for me: I spend about $500/month in marketing and I do about 2 transactions a month ( 1 buy/sell side + a rental or 2 buy/sell sides or two rentals).
My average sale price is $180K, so at 3% that's $5,400.
My average rent price is $1,200 and I keep %42 of that so thats $500 ish.
I'm at $5,900 - $500 (expenses) = $5,400.
I sale about 12-15 houses a year so on the low side that's about $64K.
The only thing that sucks is if you want to buy a house, you have to forgo your normal deductibles come tax time so you show higher income ... that blows so hard and I can't find a work around ...
I'd be considered a crappy agent! There are agents out there that do what I do annually on a monthly! That is very motivational. So to answer your questions, there's actually a boatload of money in being an agent, it's just about mastering your systems and being disciplined. I am not there yet but by studying the business of other highly successful agents, I will get in about 2-4 more years. Plus there's nothing like helping someone buy their first place and getting that invite to the housewarming and just seeing what they've done with the place and knowing you made it all possible. #Winning.
What I've done to move forward in my business is to hire a real estate coach and work on building proven systems and stop trying to reinvent the wheel. Wish me luck :-)
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @James Park:
@Johnny Lujan,
My answer would be live off of the cash flow from your rental properties.
Johnny, here are some of the books I have read before going full time into this business.
Some of the best books that I have read that has influenced me to grow as a full time real estate broker are not all within the real estate industry. Personally for me, most of the "How to become a successful retail real estate agent books" did not resonate well with me by authors like Darryl Davis and Dirk Zeller. Their technique teaches you how to cold call on FSBOs and Expires, and felt more like a used car salesman book without much use of your brains.
The books that have resonated with me the most and had influenced the way I think as a broker are the books related to top producers in the financial services and commercial real estate, not retail residential agent books.
These are the books that had the greatest personal influence on me as I started my brokerage in the northern suburbs of Atlanta.
1) The Million dollar Financial advisor and Financial Services Pratice - Mullen
2) Confessions of a real estate entrepreneur - James A. Randel JD and commercial broker.
3) The Entrepreneur Mind - Kevin D Johnson
4) How to Succeed in Commercial Real Estate - John L Bowman
5) REAL : a path to passion, purpose, and profits in real estate - Dave Crumby (excellent)
6) 6 steps to 7 figures - Pat Hiban
7) 21 Things I wish my broker had told me - Frank Cook
8) Commercial Real Estate Brokers who Dominate - Rod Santomassimo
I realized early in my real estate career, that I did not want to become a retail broker, but an investment broker. As a investment broker, you need to develop specialized knowledge and serve your clients in real estate investing, taxation, depreciation, property management, financing, and exchanging. Also by having in-depth understanding of economics and macro economic trends will put you ahead of 95% of investors.
Originally posted by @Johnny L.:
Originally posted by @Gautam Venkatesan:
Keep in mind the market is hot hot hot right now what will you do when it goes soft???
Great question I'm wondering the same thing!
That's very true! I do plan to invest in buy and hold so I could live off that cash flow of needed.
Wow great advice and great books to read! I've read several of those books and you're right they have some great info. Can't wait to pick up a couple more of them and find some more tips! Thanks so much for your help. Going to take this advice and books and put it to use once I start my career!
Thank you James!
Johnny Lujan
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Andre Key:
Johnny
I believe the hard part is developing an effective system and evolving it to make it better. Once you have a system that works it takes consistency and persistence. Consistency and persistence are not easy for all but is what I know to be some of the key factors to success.
Giving yourself the option to close deals in a multitude of ways is very smart, but it wont be nearly as effective if you don't get many leads coming your way.
I've heard about developing great systems and then you can run the business much easier. Completely agree that consistency and persistence are needed and that not everyone has both of those qualities. Thank you for your advice!
- CO · Member since 2014 · 166 posts · 44 votes11y
Originally posted by @Ugochukwu Opara:
Hey @Johnny L.,
Great question. I'm in Philadelphia, and I'm a full time realtor. I've been a realtor for about years and it's been anything but easy. However, the money is there. My company is different in that I get to keep 100$ of my commission, I just pay $65 monthly. So that helps and I did that for a reason.
So here's how it breaks down for me: I spend about $500/month in marketing and I do about 2 transactions a month ( 1 buy/sell side + a rental or 2 buy/sell sides or two rentals).
My average sale price is $180K, so at 3% that's $5,400.
My average rent price is $1,200 and I keep %42 of that so thats $500 ish.
I'm at $5,900 - $500 (expenses) = $5,400.
I sale about 12-15 houses a year so on the low side that's about $64K.
The only thing that sucks is if you want to buy a house, you have to forgo your normal deductibles come tax time so you show higher income ... that blows so hard and I can't find a work around ...
I'd be considered a crappy agent! There are agents out there that do what I do annually on a monthly! That is very motivational. So to answer your questions, there's actually a boatload of money in being an agent, it's just about mastering your systems and being disciplined. I am not there yet but by studying the business of other highly successful agents, I will get in about 2-4 more years. Plus there's nothing like helping someone buy their first place and getting that invite to the housewarming and just seeing what they've done with the place and knowing you made it all possible. #Winning.
What I've done to move forward in my business is to hire a real estate coach and work on building proven systems and stop trying to reinvent the wheel. Wish me luck :-)
Hello!
Ah so you went the 100% commission way? I've heard they offer less training but as you brought out you make more cash from your deals.
Awesome breakdown, thanks for showing me the numbers! I always do better with numbers.
Very true, there's always money to be made you just need to find it. It sounds like you are doing well, and I wish you well on your adventure! Thank you for the advice, really appreciate that!
Johnny Lujan
- Real Estate Agent · Nationwide (United States) · Member since 2014 · 99 posts · 34 votes11y
This is a great topic. I think the question itself emerges from a belief that one either has to be an investor (and do creative investing) OR be an agent and focus all of their time and energy on traditional agent tasks.
I see the license as just one of several tools we employ to monetize leads (which in our area are extremely expensive right now).
My wife and I own a brokerage, but all of our 32 agents across Texas are first and foremost creative real estate investors, marketing to distressed sellers, wholesaling, flipping, taking properties down Sub2, etc.
But when you do that kind of marketing to distressed sellers, sometimes you run across situations where the best solution for the seller (and best chance to monetize that lead) is to just list it.... either a traditional listing or a short sale listing (no, you don't have to call banks either)... or even an owner-finance listing.
I think there a lot of myths about being an agent... some of which are more true if you are caught up in a more traditional brokerage where they stress getting a high volume of traditional closings.
Common myths are:
-- I'll have to show buyers around: Not if you don't want to!
-- If I'm licensed I can't wholesale (or purchase property Sub2, or _________): You can do all the activities you find her on BP... only more
-- I'll have to show the seller the comps: Not true
-- I'll end up sitting in an office doing phone duty and attending sales meetings: Not in my brokerage you won't... you need to be out there finding deals!
The truth is, you can remain your own independent entrepreneur and simply use a license as one additional tool to monetize leads. There is not a seller we can't help, either by buying the property, wholesaling it, or listing it. Which is why we only ask one question when a lead calls, "when can we come see it?"
Truthfully, I don't understand why anyone who wants to be a creative real estate investor DOESN'T get their license. It saves money selling flips, it monetizes more leads, more than pays for itself and allows you to not waste time screening calls, but meeting sellers and locking up deals (and you instantly come into that situation with some credibility).
Happy investing!
- Real Estate Agent · Philadelphia, PA · Member since 2013 · 150 posts · 59 votes11y
Originally posted by @Daniel Francis:
This is a great topic. I think the question itself emerges from a belief that one either has to be an investor (and do creative investing) OR be an agent and focus all of their time and energy on traditional agent tasks.
I see the license as just one of several tools we employ to monetize leads (which in our area are extremely expensive right now).
My wife and I own a brokerage, but all of our 32 agents across Texas are first and foremost creative real estate investors, marketing to distressed sellers, wholesaling, flipping, taking properties down Sub2, etc.
But when you do that kind of marketing to distressed sellers, sometimes you run across situations where the best solution for the seller (and best chance to monetize that lead) is to just list it.... either a traditional listing or a short sale listing (no, you don't have to call banks either)... or even an owner-finance listing.
I think there a lot of myths about being an agent... some of which are more true if you are caught up in a more traditional brokerage where they stress getting a high volume of traditional closings.
Common myths are:
-- I'll have to show buyers around: Not if you don't want to!
-- If I'm licensed I can't wholesale (or purchase property Sub2, or _________): You can do all the activities you find her on BP... only more
-- I'll have to show the seller the comps: Not true
-- I'll end up sitting in an office doing phone duty and attending sales meetings: Not in my brokerage you won't... you need to be out there finding deals!
The truth is, you can remain your own independent entrepreneur and simply use a license as one additional tool to monetize leads. There is not a seller we can't help, either by buying the property, wholesaling it, or listing it. Which is why we only ask one question when a lead calls, "when can we come see it?"
Truthfully, I don't understand why anyone who wants to be a creative real estate investor DOESN'T get their license. It saves money selling flips, it monetizes more leads, more than pays for itself and allows you to not waste time screening calls, but meeting sellers and locking up deals (and you instantly come into that situation with some credibility).
Happy investing!
Absolutely. I completely agree here. Having your license doesn't slow you down at all, I've always had my license so I'm bias but I can't imaging dragging an agent down to comp out 10-15 potential flips in the 50K-100K price range knowing he/she is only going to make $1000-$3000. I run comps so much it's ridiculous. I mastered my market just by seeing 2-4 properties every day when I first started and I still do so today. No agent would be willing to put up with me.
But what does this mean income wise? I can offer a seller everything you can (wholesale, subject to, lease option, creative finance, funding, etc ... plus more (listing, mls, lease, short sale, forclosure, property management, developers, refi)! Plus I'm a reputable full time realtor licensed with the state to handle real estate transactions and I have my finger on the pulse of my local housing market. I also care errors and emission insurance. How comfortable does a seller feel with me?
How do you compete with me? The answer is you don't, you just jv with me.
These are just my thoughts, maybe I am missing something?
- Residential Real Estate Broker · Santa Clara, CA · Member since 2015 · 9 posts · 3 votes11y
Originally posted by @Daniel Francis:
This is a great topic. I think the question itself emerges from a belief that one either has to be an investor (and do creative investing) OR be an agent and focus all of their time and energy on traditional agent tasks.
I see the license as just one of several tools we employ to monetize leads (which in our area are extremely expensive right now).
My wife and I own a brokerage, but all of our 32 agents across Texas are first and foremost creative real estate investors, marketing to distressed sellers, wholesaling, flipping, taking properties down Sub2, etc.
But when you do that kind of marketing to distressed sellers, sometimes you run across situations where the best solution for the seller (and best chance to monetize that lead) is to just list it.... either a traditional listing or a short sale listing (no, you don't have to call banks either)... or even an owner-finance listing.
I think there a lot of myths about being an agent... some of which are more true if you are caught up in a more traditional brokerage where they stress getting a high volume of traditional closings.
Common myths are:
-- I'll have to show buyers around: Not if you don't want to!
-- If I'm licensed I can't wholesale (or purchase property Sub2, or _________): You can do all the activities you find her on BP... only more
-- I'll have to show the seller the comps: Not true
-- I'll end up sitting in an office doing phone duty and attending sales meetings: Not in my brokerage you won't... you need to be out there finding deals!
The truth is, you can remain your own independent entrepreneur and simply use a license as one additional tool to monetize leads. There is not a seller we can't help, either by buying the property, wholesaling it, or listing it. Which is why we only ask one question when a lead calls, "when can we come see it?"
Truthfully, I don't understand why anyone who wants to be a creative real estate investor DOESN'T get their license. It saves money selling flips, it monetizes more leads, more than pays for itself and allows you to not waste time screening calls, but meeting sellers and locking up deals (and you instantly come into that situation with some credibility).
Happy investing!
This is so true. I just started marketing for wholesale deals and ended up getting a lead for a $1.5M listing. Could not do anything with it if I wasn't licensed!
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