Six-Figure career switch to Real Estate Agent?

Six-Figure career switch to Real Estate Agent?

Los Angeles , CA · Member since 2017 · 23 posts · 35 votes

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?

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y

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.

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  • Real Estate Investor · Anchorage, AK · Member since 2016 · 27 posts · 6 votes
    8y
    I say go with your gut but realize I believe in what we are told internally. You are intelligent, it seems, from what you say, your ability is great, so go with that given gift. Use this site to connect, gain knowledge and expand your horizons. Best wishes. You will be fine.
  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    8y

    @Solomon Ganz I made the switch after 10 years in the music business and an MBA with a focus in marketing.  It can definitely be done and you can be successful.  I have found it very easy.  However, on the investment side of your idea, unless you are planning on paying cash for your investments, when you switch from a W2 job to a 1099 job like real estate, lenders usually want to see 2 years of 1099 income, which for your first 2 years of full time real estate work will likely be less than your current income.  

    I was able to make it work because the reason I got my license was to avoid having to use an agent for my own transactions.  When I got burnt out on my job and decided to make the switch, I had several short term rental properties and could support myself off that income while getting ramped up as an agent.  My advice would be to tweak your plan to get a couple investments under your belt while you still have that nice W2 income.  Don't let that 15 years go to investment property waste!

  • Rental Property Investor · Seminole, FL · Member since 2014 · 85 posts · 68 votes
    8y
    If I were in your same situation (we kinda are), I’d probably keep the job and get a few rentals to cover some or all your fixed expenses (rent, car, food, utilities). And live well below your means. Then become a realtor after that because you might have a few months of no or low income and the passive income will help keep you afloat. Also, I’d also just put the building blocks in place (RE license, get with a broker). That way you’re positioned to transition should you get axed at the W2 job. Start investing/saving now though!
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    The plan sounds like solid one.  You could also start part time and get a feel for it.  Burn the candle at both ends before jumping in.  I know it is hard to do when you want to leave your other job but it's worth testing the waters first so you don't end up in a bad position.

  • Investor · Wichita, KS · Member since 2017 · 584 posts · 813 votes
    8y
    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.

    I'd stay in the corporate world and work as a real estate agent on the side for a few years. Selling 10 houses a year is not as easy as it sounds, unless your brokerage is giving you leads (they typically don't when you are a newbie). Buyers are also coming in in large part from overseas per what I am gleaning from watching real estate shows in the California area recently. So you'll want to concentrate on getting listings until you know where the buyers are coming from. Unless you have a connection with Bravo and can find yourself on television, I'd keep the 9-5 for a couple more years.

  • Investor · Orlando, FL · Member since 2016 · 355 posts · 380 votes
    8y

    @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. 

  • Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
    8y
    Having been an agent in a large market in Northern California I can tell you it is very difficult to work part time because you are going go have a nightmare showing houses after work in traffic and board fees are much higher. Having built a successful business where I am my wife’s office manager basically part time while she has grown a thriving business I would suggest investing heavily in marketing and downgrading your lifestyle and going full time at it in your market. Lead generation is the lifeblood and its hard to work leads and get people to choose you when you don’t any devote all your attention to your trade full time. My personal feeling having grown two businesses myself is you will learn to swim if thrown in but if for some reason you don’t you can always go back go being unhappy at your full time job.
  • Denver, CO · Member since 2017 · 15 posts · 8 votes
    8y

    @Solomon Ganz I did pretty much the exact thing three years ago. I was in a lucrative finance job in New Hampshire but realized I wasn't getting much further (and was burnt out). I moved to Denver (hot sellers market) to get into real estate. I knew only my sisters in Denver. I will be honest, it is very hard but if you want it bad enough you will get it. The first 6 months I only made 15k. Three years in is where I am reaping my reward - I now run a mostly referral business and my last two deals were people I met 3 years ago! In real estate you are not on your timetable but your buyer/sellers. Two things I would suggest - 1. focus on building a sphere early on. You have a (dis)advantage in a new community and will need to focus on making friends/acquaintances. These will be your deals in 2-3 years. 2. Capitalize on your sphere NY, if you can get a few referrals a year from NY, that will help you with cash flow. I will end up making close to 12k this year in referrals from NH. Feel free to reach out for help/support. I say do it, either way you are going to have to work hard, might as well do it doing something you enjoy. 

  • Kingston, NY · Member since 2017 · 252 posts · 138 votes
    8y
    Don’t do it. I have no idea about your market or anything but having a w2 income should be considered a blessing. Start investing, do the agent thing on the side, get good at it and then switch. You don’t even know if you’d make a good agent yet let alone one to offset your income. I’m an MD. I make mid six figures and I was considering the same thing. You don’t learn to swim from scratch by jumping in the deep end.
  • Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
    8y

    @James Canoy you are an MD and considered becoming a real estate agent?

  • Real Estate Agent · Akron, OH · Member since 2017 · 73 posts · 48 votes
    8y

    Do whatever makes you happy. Being an agent definitely takes some time before you become a top producer but if its something you enjoy, do it. Maybe get your license and do it part time before you completely dive in. It is never too late to make a career change if you are unhappy. Plus, your background in marketing would probably be a huge help in real estate. 

  • Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
    8y

    @Andrew Ashby , good points. I recently sold my home listed with a broker that has been working in the same area since the late 1970s , but he said he spends like $30,000 a month on marketing. I saw his name popping up on Zillow a lot so I'm sure he pays them a pretty penny too. 

    Interesting you mention you are transitioning to commercial. Someone had posted that in California commercial is like 70% of the sales value but only 5% of agents are commercial agents.  Good points too about having to pay your own health insurance as an agent that's a huge expense right there.

  • Phoenix, AZ · Member since 2016 · 3 posts · 3 votes
    8y

    @Solomon Ganz

    I'm in your exact same boat...spent the last 12 years in finance making 6 figures with no real upside. I put in my notice yesterday and will be doing real estate full time beginning in January. I don't expect it to be an easy journey for me, but that's what's exciting to me. I've spent too long being comfortable with a steady paycheck and it's time for me to shake things up. 

    In my first few years, I don't expect to replace my corporate salary, if I do, great! but if I don't, I'm fine with that. My focus is going to be on hustling and building my business to be sustainable for years to come.  

    For me, the decision to "take the plunge" was not an easy one, terrifying as hell, actually. But like you, I'm young and if I fall flat on my face, I can always go back to corporate life. At the end of the day, I don't want to look back and say "I should have tried"

    Best of luck in whatever you decide!

    Cheers,

    Phil

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    8y

    I would have transitioned more (got educated and started the agent thing on the side) before I left my current career, but I think that's a moot point now.  

    I would have (and did) use my steady income while I had it to acquire a property and a heloc right before I left.  You won't be buying conventionally for a while now as I'm sure you know.  Funny how the mortgage/credit application doesn't ask 'Will you be leaving this employment/income-source anytime soon?'  I would've have been like,  'Yep.  Next week.'  But they didn't ask...

    I know about just jumping into RE, dock or no. Just jump from the boat and see what happens!  Hard to get more motivated than that. 

    I quit my cubicle career/job in Denver and bought a doublewide by the river 3 states away so I could be free. Trial by fire is one way to do it. If you don't swim your head off you will drown.  Motivation!

    Now that you're there, offer value to the best agents in your area and here on BP in exchange for some advice and guidance.  It's difficult to not appear hungry and anxious starting a new thing, but people smell it.  Ever gone into a job interview after being unemployed a while?  The people that interview well are self-assured and reluctant.  You were in marketing, so that should be an asset.   Build on what you've been doing and please keep us posted!

  • Rental Property Investor · Fort Collins, CO · Member since 2008 · 168 posts · 105 votes
    8y

    @Solomon Ganz Makes sense. After re-reading my comment, I sounded like a smart ***! I totally didn't mean it like that. 

    Have you thought about starting your own small business in the marketing space to keep money coming in? Sounds like you're an expert in that area. You can easily charge $200/hour for your skillset and take on projects you want. Heck, it might really take off! That would be a good way to jump start your RE career. 

  • Real Estate Broker · Wilmington, NC · Member since 2016 · 236 posts · 126 votes
    8y

    I was in a very similar situation to yours, OP. Cushy job, high paying job that bored me to tears.

    All I can see is that you better like risk. Being a real-estate agent about pushed me to the edge and back. Many sleepless nights, long hours, and overall uncertainty. Not to mention the amount of self-doubt, haters, and people just rolling there eyes at you thinking your crazy.

    I made and I'm glad I did it, but it came with comes with some serious bad parts too. Don't let people sell you on a dream.

  • Investor · Frisco, TX · Member since 2014 · 17 posts · 8 votes
    8y

    Being a Real Estate Agent is all about building relationships. People want to do business with people they like.  

  • Real Estate Agent · Chicago, IL · Member since 2013 · 386 posts · 218 votes
    8y
    If you thought about it. You should do it! Life is short. Being a realtor is not hard just takes dedication and hard work- much like anything.
  • Investor · Asbury, NJ · Member since 2015 · 226 posts · 205 votes
    8y

    @James Canoy @Joseph M., I am also an MD, looking to get out in the next five years. Most docs are miserable these days. There is no ceiling to what you can make in real estate with a fraction of the hassles of practicing medicine. We are currently working on our second flip this year and also bought an investment rental property this fall. Walking away from that W2 is really tricky for us high earners, I imagine it's easier in a way for people who are starting with nothing since they have nothing to lose. I am so inspired by all the young and 1st Gen immigrant members of BP, they have got the right idea, more power to them! My goal is to pay off our mortgage and build more of a cash cushion, then I can work PT or less someday. The challenge for me now is looking for/managing deals when I am working in a busy clinic 35 hours a week with no internet access, limited phone time, etc. I know that if I cut down my hours I would easily fill that time with real estate but I can't do that right now. Aside from the W2 income, the loss of benefits will hurt--401K contribution, health insurance, paid vaca. But buying back my time and freedom from medicine someday...priceless!

  • Rental Property Investor · San Diego, CA · Member since 2016 · 306 posts · 205 votes
    8y

    @Solomon Ganz I think there has been a lot of good advice and information already given. As a newer agent myself, I'd say you should go for it. I had a mini breakdown while on a vacation with my boyfriend in Hawaii when I was finally coming to terms with leaving my high paying tech job and jumping into the unknown of being self-employed! I will say that I love it though so far and am not looking back. It takes a long time to build a foundation of a business that will grow over time, so don't expect to make a lot of money right away, but once you get clients then it starts to snowball.

    One thing that hasn't been brought up is the amount of time it takes to get licensed in CA. There are the classroom minimum time requirements as well as the amount of time it takes for the BRE to process your paperwork. For me, it took about 3 months to get a test date from when I completed the classes and sent in my paperwork! Just something to consider since you mentioned you already left your job. It might be a good idea, as others have brought up, to do some consulting work on the side for an agent to learn about the marketing aspect of real estate. This way you can create some income while studying for your license and waiting for the BRE to process you. 

  • Real Estate Investor · Madison, WI · Member since 2016 · 19 posts · 10 votes
    8y
    My opinion only: it seems like you’ve made up your mind, left your job and did a great job saving up 1+ years worth of emergency funds/living expenses. Now’s the time! Be hungry, be willing, be aggressive and give it your all. It’s your life and you’ve only got one to live. If others can make it and make it big, why can’t you? Advertise yourself, build that network, find your niche and go for it!
  • Real Estate Agent · Saint Louis, MO · Member since 2016 · 17 posts · 22 votes
    8y
    I am in your EXACT situation. I asked the same questions a few years ago. Here’s what I’m doing. Since real estate is a passion, I became an agent part time. I do around 15-20 deals a year to really learn the business. I’m using my primary income to fund my personal deals (flips and acquire rentals) as well as any commissions. I’m also investing I’m dividend earning (stable) stocks for additional income as well. My goal is to create enough rental income to take care of my bills and reduce debt. My secondary goal is to increase savings substantially. Without guaranteed income, I will need savings if I ever need loans for future investments. Plus, I have to provide my own healthcare once I leave my primary job (don’t forget that). A portion of my rental income also takes care of my retired mom (don’t forget about possible family members that may need your help). There will be a period when the rental income takes care of all my bills while still working the primary job. This is when the savings will see serious growth. Think about it... no bills means you can save the entire six figure salary... Once I have the numbers comfortable for me AND my bills are covered by rental income, I plan to do real estate full time. I will also enjoy the benefit of having years of being an agent under my belt (I’ve learned high $ property owners typically like experienced agents not new ones handling their deals). Real estate market fluctuates. I cannot lose income because of a tight housing market. The rental income should support me if / when the market turns. The savings will provide insurance in case of rental vacancies. And worst case scenario the savings will cover me during my job hunt IF I have to go back to a 9 to 5. Good luck to you. This is a great opportunity if you plan it properly!!!
  • Investor · Riverside, CA · Member since 2015 · 280 posts · 111 votes
    8y

    If I were to do the RE thing it would be part time until I built enough clientele and referral and the network to support myself as much of more than I would at whatever job I was doing. 

    Not only do you have the competition of seasoned and new agents but you’re dealing with a shortage of housing in some cases. So you’re last or close to last in a long line. 

    If I were to hire a agent I wouldn’t hire a new guy simply because I don’t wanna be the beta test for his mistakes 

  • Realtor · San Jose, CA · Member since 2016 · 15 posts · 0 votes
    8y

    @Solomon Ganz Do not need to read those replies which discourage you from what you are doing. You've already made the decision. Go with it. Believe in yourself. I am in the same boat as you but much younger. I recently quit my job and will move to LA for RE. Which part of LA are you planning on doing?

  • Realtor · San Jose, CA · Member since 2016 · 15 posts · 0 votes
    8y

    @Daniel Klein Hi, Daniel, would you mind if you tell us what niche you started with? I would really appreciate it.

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