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?

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.

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.

From my perspective as someone who got licensed at 18 and is now 61 LOL Ugh.. and all I have ever done is real estate sales etc.. its a lifestyle if you think its a job your sunk before you start.. there are now hours.. your hours are owned by your clients.. much like a mortgage broker who is a top producer. And since my dad had a real estate company and I saw literally 100s of agents come through the doors and I have owned 3 brokerages.. its the same old adage 10% make 90% of the money.. now GENERALLY speaking those 10% ers are highly motivated have excellent support at home.. they have good to great sales skills and people skills.. and like I say they don't look at a clock or calendar.. every day is work day.. in this business you have normal lulls.. like thanks giving and Christmas that's when you take your vacations .. NO VACATIONS in the selling seasons.. that kills agents.. Also for those that come from w 2 one of the main things they get fubared on is now being on the honor system to pay their tax's . bigger issue than you might think. Now for the positives.. for me personally its created everything I have ever done in real estate.. the connections alone that you make the lifelong clients .. keep an open mind you get offered to get into deals.. you sell a house to someone you know has investment money you already have a relationship.. guess were that can lead. its dog tough in the start up like @Russell Brazil alludes to.. everything he says is 100% accurate... however once U get over the hump this business gets pretty dog gone good.. my wife sold 16 million last year on her own.. almost all referral. But that's 25 years in the business.. and she started out as a single mom with 3 daughters selling 50k houses in semi rural Washington.. so she knows tough.. But now a week does not go buy and someone calls and says Lori you sold me a house 7 years ago I liked you and want to list.. well now that 50k house is 350k . she prepares a listing package goes over and lists and sells.. deal is done for her.. were it gets good was like this week.. she had a listing on a home buyer comes in they want to buy they liked her so she was a dual agent then they list their home with her.. she gets lucky and finds the buyer of that house. so she doubled ended both of them and even giving a break on commish which she does in those situations. it was still a just under 35k pay day for her last Friday.. and 2 sets of happy folks. in our market she pays a flat fee of 12k a year and gets 100% commish.. because her business is all referral other than perma flyers and some signs she spends no money on marketing ( this is not going to be u to start for sure. ) but my point is by the time your our age and you are successful this becomes a very nice business.. WE travel the world and she does her deals from her phone.. in our market she has an assistant who is self employed who does her paper work fo4 400.00 a file worth every penny.. Broker won't pay her unless its all complete.. So yes I am very proud of her and she has all the tools to be a top producer but she put in the HARD WORK to start.. were I have seen folks like you succeed on west coast is get on a team to start .. let them teach U learn from a top producer I have seen many start there work for their team owner for 2 to 3 years then launch out.. I like that way to break in. For me personally I sold real estate form 18 to 32 ish.. and I was a land man.. I only sold land .. ranch's etc. I don't think in all those years I sold more than 3 or 4 actual homes unless the home was on the ranch.. long lead times.. but most of the land I sold was owner financed or sold for cash.. quick closings .. and did not have to deal with the banks or apprasiers you see I did not like that part of it.. frustrated me.. and let me tell you... when some client that owns a tech company wants to buy a 3 million dollar ranch for a second home.. and your their agent guess were that led me.. then you get invited to their parties and you understand they are worth 100s of millions but they take your call... that's the angle I ran on. you can do the same in La la land.. go work for a team in Bel air or Beverly hills run with the money crowd use your skills to get your own clients over the years... Also another thing I personally did was on some development land deals I would throw my commish in for a piece of the action .. and I would help on the development side.. that's how I learned that end of it.. kind of like a paid training.. that led to all sorts of great contacts over the years. but make no mistake starting out I was like everyone else too much month left and not enough in the bank.. and you have no guarantee of anything.. but when you get over the hump boy is it good..

@Solomon Ganz - I left a 9 year career in advertising to do real estate full time in 2014 at 31 years old (I actually used to work for the LA Times back in the day) • I have been licensed since 2004 and as of 2014 I had only done my own deals • I had a portfolio of properties already, and since I was already doing commercial loans the change in income would not affect my ability to get more loans (Why I bring this up is you will need 2 years of tax returns with that income on it. So say you quit January 1 2018 you will not be able to use any of that income until spring 2020 when you file. They will also use the average of the last two years, and it takes time to build the business so it will likely be 2022 when you file taxes till you can use your full income) • My rental income from my already established properties pays my bills. This is important because at least in Chicago where I work, the market dies in winter. I once went 7 months without a closing/paycheck, so you need to be able to financially handle that. Then there are months like this where I made over $30k. It is inconsistent and your bank account needs to handle that. Bt I make more money now from the brokerage than I did in advertising. • Because I don't need the money to live, I can really put my clients first. I don't need them to buy something so I can pay my mortgage. It has allowed me to build my business with the client's needs being first. In turn, I have not had to do any marketing because it is all referral based. I even had to bring on an agent this year to help me with the volume of clients I have. • I love my life now. I get to talk about real estate all day in my pajamas. I geek out over real estate and now I get to geek out with other people about it. It is not work to me because it is probably something I would be doing anyway. My expenses are also lower because gone are the stupid suits I used to have to wear and now my wardrobe is 75% yoga pants. • The flexibility is great and challenging. You have to set expectations with people. I always work Saturdays and will see properties just to see them, but I don't work Sundays unless a fantastic property comes up that I have a few clients interested in and it is only showing Sunday. If it is a nice day usually my husband and I take off for a few hours on the motorcycle. Last year I went to Europe for 5 weeks and I usually take 10-12 weeks off a year. But then there are days when shit hits the fan and I need to drop everything I am doing to handle it. Sometimes I work 12+ hours a day. Sometimes I forget to eat. It is all about learning to manage priorities and manage the expectations of your clients. I am lucky I only work with investors, so they get it. They want to be in a position to take a month off in europe, so they are not demanding of me while I am living that life. • I will never go back to a corporate job. It has been a lot of work getting here, I put my heart and soul into it, and I will never do anything else. My advice to you would be this; get licensed now. Start working part time and building the business while you have the financial safety net. Figure out how you are going to pay your bill for 1 year without an income, because that is a likely scenario. And then go for it. When I quit my job it was to run my portfolio, not be an agent. It was just something that happened naturally as people were asking me to help them. I never looked back and neither should y

@Solomon Ganz, thanks for starting this discussion because it's one that needs to be had. As someone who just quit a low 6-figure job in pharmaceuticals and became an agent full time this past July, I feel obligated to add my input here. If you decide to do this, I hope your plan includes staying where you are and leveraging your existing network. I say this because my switch involved an interstate move. I quit my pharma job in Chattanooga TN and relocated my family to the Orlando area where I have a very small network (I was raised in Kentucky, went to college in Maryland, and was stationed in Florida and Rhode Island with the Navy). Residential real estate is fiercely competitive and crowded, especially in an MSA like Orando where there are about 14,000 Realtors. Everyday, I have to compete with people who grew up here or have been here for 20+ years and have built-in networks of high school classmates, college classmates, church members, family friends, etc. Most people don't know that new agents are starving for leads and many pay four-figure sums monthly to the likes of Zillow and Realtor.com just for the chance to snag a few buyer leads here and there. I finally closed my first sale last week after doing this for 3 months, and even then I had to pay another agent 50% for that lead. I'm living off my 401k (at steep penalties) and my rental income (I only have 4 units). Fortunately for me, I'm making my way into commercial real estate (and getting paid for it) by working for a mentor. If you decide to make this move, you have to be prepared to be shunned by mortgage brokers for 2 years (or until you can prove 2 years' worth of commission history). You'll need to have a plan for healthcare (my COBRA for my family is $2,200 per month) and housing (rent is $1,750) and know how long you can go without getting paid. I still don't regret my decision, but it's certainly harder to find clients than I ever could have imagined.

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.

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

@Solomon Ganz the first step is considering a career as a real estate agent. Congrats, as you have already realized the limited upward mobility of your current situation. I'll give you some NAR stats. There are 500k agents in California. 97% makes less than 30k/per year. Only 5000 make more than 500k plus year. You would need to sell $25 million a year at a 100% split to make that kind of money. If you look at the last 10 years top 100 agents, there are maybe 10 who do this consistently. I made top 50 in LA my rookie year and well over $300k. But I didn't sell SFRs, I had a leg up on most agents (as I can articulate highly complex ideas) and my niche is still completely open and untapped. If I were to do it again, I would have skipped brokering, and been a principal from the get go. I made more clients more millions than I could ever make sellling real estate. Being an agent is extremely competitive. If you can't TRULY differentiate yourself to your clients, you don't have an edge. Also learn how to leverage/outsource most of the marketing/paperwork. You are paid to sell, not babysit escrows. Good luck

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.

@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.

Six-Figure career switch to Real Estate Agent?

Matt K.

Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes

8y

He was probably representing the buyer(s) and probably in larger projects/multi family (possibly on the commercial side of things). I'd assume he'd help clients make/find investments vs selling someone selling their house or buying first home.

Six-Figure career switch to Real Estate Agent?

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