Six-Figure career switch to Real Estate Agent?

104 Replies

Hey all, I'm a 37 year old with a successful 15-year advertising career making six-figures.  My largest frustration is that my salary is beginning to cap at low six-figures and the % of people making huge amounts of money (500k+) is like 1%.  And, if and when you attain that, you can easily get fired at any moment (I've seen it countless times as executives get into their 40's) and then you're down to zero income overnight (with a hard time finding a new gig).  I'm strongly considering a career-switch to Real Estate Agent as it seems the income possibilities are endless (assuming you work extremely hard and are a people person, which I have both).  My plan would be to hit it hard and make as much as possible within a few years, but also as I become an expert in my market, have the time flexibility (which I have none of in my current job) to find and partner with some investors to buy-and-hold or fix-and-flip some properties over the years (maybe dedicate 1 or 2 days a week to this).  I would love your professional opinions on whether you think at 37 years old I have lost my mind to leave a successful career path for this plan?  Is 37 too old to get into the Real Estate Agent game, from scratch?  Assuming I have the people skills, and precision focus and motivation to hustle; how long would it take to make six-figures as an Agent in Los Angeles, realistically?

You're crazy if you want keep investing... keep your documented income as long as you can. Maybe I'm wrong (not an agent) but I'd wager it's probably harder than you think to make equivalent salary. Sure commissions might look big, but there's probably A LOT of costs you're not accounting for. 

Why not go get licensed and start doing it on the side/part time.... get your feet wet before diving in head first.

Real estate is a great career, once you get it going.  IT probably takes a good year of paying money, dues and time before it becomes profitable. 

If you have enough savings or other income to tide you over, I say go for it.  37 is still young. Most people in the RE world had some other career before and transitioned into RE for some reason. 

I would be focused on learning the trade, prior to learning to do fix and flips.  They are 2 very separate jobs both with their own expertise. 

You can get your license and do the start up work part time while you are still working and save ll the money you can, knowing you will need it later.   

Best of luck!  Make sure you are confident that you are self motivated, that you can seek out clients through your connections,

I'm sure you can do it!!

@Matt K. thanks for the reply.  I already left my job.  For 15 years in advertising, there has never ever been any time whatsoever for a side-hustle.  It consumes you 24/7 at 200% commitment.

@Christine Kanowski Thanks for the encouraging reply.  I have enough savings to live a year with no income.  Does this make my decision much more reasonable?  My advertising career has been in NY and I'm looking to start my RE career is Los Angeles (closer to my parents who live in LA now).  So, I'm essentially starting from scratch.  At 37.  Scary!  Just trying to see if this is doable.  The ultimate short-term goal is to make six-figures within a couple of years and then way more than 200k (which would be my cap in advertising).  I feel like it can be done!  All these interviews I watch on YouTube (granted, very successful agents) are making millions.  In advertising, or any employee job for that matter, no matter how hard you work, you are capped.  Get my thinking?  :)

Time flexibility and successful Real Estate Agent do not belong in the same sentence (especially starting out). I do not know anything about the LA market but getting to your target number would be feasible with hard work and long hours. There are many things to consider prior to becoming an Agent i.e. taxes, health insurance, desk fees, mileage, hours, advertising costs, no 401k etc. etc. I have worked seven days a week since the beginning with my average hours being, M-F 9-8 S&S 9-4, and my phone is on in those few hours in between in case I can make $$$.

Im slightly older than you at 38 years old. I made the switch from working in one field where I was in the low six figures to working in real estate 4 or 5 years ago. However I was a part time agent for about 10 years before that, so I wasnt exactly jumping in blind.

I found the jump pretty easy, and make considerably more than I use to, and also considerably more than most agents. However I live and breath real estate, so I dont really think of what I do as work per se.  

There is a reason though why roughly 90% of agents drop out of the business in year 1, and 90% of the remaining drop out in the 2nd year.   Those of us who are successful consider it pretty easy to make it in the business, but it really isnt.  Ive seen very smart people, very hard works fail at this business, and it can be hard to put your finger on why one person succeeds and another fails.

In a major metro area, someone with talent should be able to make it up to that $100k level.  The jump though from that $100k level, and being kind of a 10-15 transaction a year agent, up to say the $300k level and 30 transactions is going to be a much smaller number of people. Then from there you kind of make the jump up from there to your larger real estate teams where the team owner can make anywhere from $500k to upwards in the several million per year.  

To put it in prospective though, for individuals selling $20 million in sales volume, or teams selling $30 million in sales volume per year.....you are looking at roughly 1,000 people in the entire country.  The list is published every year by the Wall Street Journal and Real Trends.  Also as an FYI, a top solo agent may have a profit margin of 70% of gross commissions, while a team owner has a profit margin somewhere around 30%,  So of those agents selling $20 million in volume, you could probably ball park their actual salaries in the high $300's.

The biggest thing to consider though is that being an agent is running a business and not having a job.  And businesses take operating capital, whether there is revenue coming in or not.  So having $15-$20k per year to invest into your operating expenses as a beginning agent is going to go a long way towards success as opposed to someone who has no money to invest.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

Have you looked at any of the job sites that show the salaries for agents? I'm not trying to talk you out of this career change... rather it appears you're good at marketing. You seem nervous about topping out... however why not use your documented income to invest (I mean this is BP after all...). You can take it step further and get your license and be your own agent....

But I guess if you're stuck "24/7 and 200%" in a marketing job... you'd have no time to invest... so nm.

@Patrick Collins thanks!  By flexibility, I mean if in say a year from starting at as an Agent, I decided to focus one day a week on RE investing vs. acting as an Agent that day.  I'm guessing I have the flexibility to do so (since I won't have a boss), and choosing to slow my hustle down of course and limit my potential income in that one day a week.  That was my point in flexibility.  If I wanted to invest in RE while working full-time in advertising, I would not have a day to do this, nevermind even 30 minutes in the middle of my day.  You are owned by your company.

@Russell Brazil thanks for the thorough response, much appreciated!  What's the difference between a solo agent and a team leader?  Houses in LA are through the roof -- you can't even find houses for under a million.  Assuming with hard work I can make 500k and up!  I think!?

@Matt K. "But I guess if you're stuck "24/7 and 200%" in a marketing job... you'd have no time to invest... so nm."  EXACTLY!!

Originally posted by @Solomon Ganz :

@Russell Brazil thanks for the thorough response, much appreciated!  What's the difference between a solo agent and a team leader?  Houses in LA are through the roof -- you can't even find houses for under a million.  Assuming with hard work I can make 500k and up!  I think!?

 I'm curious how much you think an agent makes off a sale of say that sale, sure let's use million for easy math.

@Matt K. As I understand it from realtors here in LA, for a million dollar house, the buyer's agent and seller's agent each make 2.5%.  So that would be 25k.  And I'm sure 30 -- 50% goes to the brokerage company.  So that would be an income of around 15k.  Why do you ask that?  So to make 150k a year you'd need to sell 10 million dollar houses a year.  Or, just five 2 million dollar houses.  Which again, is average in LA.

Advertising, taxes, and healthcare, retirement (if that's important).

Taxes alone going to knock about another 30% off...

@Matt K. if you make 150k in advertising career, you still need to pay 30 -- 40% to taxes as well.  And out of that you also need to contribute to health insurance, and your 401k.  This is all assuming pre-tax forecasts.  Anyway, thank you.

Originally posted by @Solomon Ganz :

@Russell Brazil thanks for the thorough response, much appreciated!  What's the difference between a solo agent and a team leader?  Houses in LA are through the roof -- you can't even find houses for under a million.  Assuming with hard work I can make 500k and up!  I think!?

 Well only about 500 agents in the entire state of California make that amount out of 100,000 agents, so I wouldnt nessecarily plan on it.  A team leader or owner employs other agents on their team.  

To make $500k as profit, or salary means selling a hair under $30 million in sales volume.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

30 mil is easy... that's just six 5mil houses, that's not even 1 a month!

(heavy sarcasm)

@Russell Brazil @Solomon Ganz
Very timely topic and I'm also contemplating starting a part-time career.
Russell, can you let us know how exactly did you start? What kind of advice would you give to a new career-change agent?

@Matt K. You may have heavy sarcasm, but that is exactly what I intend to do.  And more.  

Originally posted by @Solomon Ganz :

@Matt K. As I understand it from realtors here in LA, for a million dollar house, the buyer's agent and seller's agent each make 2.5%.  So that would be 25k.  And I'm sure 30 -- 50% goes to the brokerage company.  So that would be an income of around 15k.  Why do you ask that?  So to make 150k a year you'd need to sell 10 million dollar houses a year.  Or, just five 2 million dollar houses.  Which again, is average in LA.

 70% of your gross commissions for a top agent is your typical profit, or salary. That accounts for brokerage take and business overhead. Top agents typically pay their brokerage a straight yearly fee then have a high split. For instance I pay a $20k fee and have a 90% split. There are bettet deals in well any market, but you will find nearly every top agent is with a top brokerage. You will not typically find a top producing agent at a no name brokerage, as they usually understand the value of branding. 

Also the median home price in the LA metro area is $550k. Thats probably a more realistic expectation of your median sales price.  Very few agents median sales price varies from their metro areas median home value. In fact it will take you awhile to work your way up to the median.  Sellers of million dollar homes do not typically use newer agents. Id say it was about year 3 in the business full time by the time I pushed my median price up to match the metro areas median value in my market.

The average full time agent, this exclused part timers, does about 10 sides per year.  20 sides per year typically for a major metro area makes you one of the top solo agents in the market. 

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

Why would the owner of a high end property like that contact you to sell their home? Or, why would the buyer of a high end property like that call you?

For perspective, there's 56 listings on redfin between 2-5 mil in LA.

Again, not telling you that you "can't" do this, rather challenging how realistic it is that you "can". Seems the odds are you land a 500k yr marketing job more so than you get it as a realtor.

I don't see how replacing one customer facing job with a new customer facing job is going to help you get some free time to invest. You're also going to have a much harder time getting loans if you make such a change like this and who knows for how long because it could take a while for you to build up your income history so you can start investing again...

But, seems like you got your mind made up and feel this is the right choice regardless of the other side, so best of luck.

There is no reason you can't be successful...boldly successful in Real Estate.  I say take the plunge, work hard, and since you have a background in advertising, you already are one step ahead of the game.  I am contemplating the same move sans the 6 figure current income...best of luck to you! 

I just did the same thing that you are considering.

I ran my own music business for the past 12 years.

I got burned out and decided a year ago it was time to move on.

During that year I've spent tons of time researching, learning, posting here on BP, listening to podcasts, etc.

Like you, I was able to put away some savings to live off the past year and get going with my REI aspirations.

I'm 34 years old and as of today I'm focused solely on REI moving forwards!

@Brian Garrett amazing!  may I ask how it's been going?  I'm assuming you're going in on the investment side vs. agent?  My plan is to go all-in agent mode for at least a year until I have a little more money to invest, and then take a day or two per week to focus on investments as well.

@Halcyon Hoagland thank you for your inspiring response!  So, how has it been going in your first 15 months?  Is it unrealistic to think I can make 6 figures in my first 2 years as an agent?

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