Why aren't realtors investing?

Realtor · Northern Virginia · Member since 2018 · 17 posts · 31 votes

Hey BP,

I'm relatively new as a real estate agent, but one of my main goals are to become a successful investor, focusing on building a portfolio of rental properties (hard to find cash-flowing properties in the Northern Virginia area btw, from what I've seen)

As I haven't "made it" yet as an agent, it's crazy to see that the agents who are making good money, aren't investing themselves, with all the resources and tools they have at their disposal.

Why is that? I feel like it's especially needed when you have a commission-based job

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Steve Vaughan

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

Like any industry, the Pareto Principle applies. 80% are average, 20% rockstars. I'd venture its even closer to 90/10. The agents that are here contributing to BP are def the top 10%.

I ask the same of contractors. Why don't you invest? You get calls from people with house problems all the time. They look at me like I have a 3rd eye even though this is the 8th different job I'm hiring them for.

Investing to hold a cash-flowing asset does not cross most sheeple's, I mean people's, minds. Baa-ah, gotta get to work. Baa-aah, it's almost Friday. Be grateful there aren't more of us :)

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Michael J Callinan
Rental Property Investor · Clinton, CT · Member since 2016 · 49 posts · 36 votes
7y
I work with a top agent in my market and we have had this conversation. He has plenty of reserves, knowledge, capability. That can also describe the thousands of other people interested in real estate but never pull the trigger, They're scared. Scared of the unknown, scared of failing, who knows. Everyone has their own excuse why they don't do something but majority of people like to stick with what they know and not venture out.
3 Reply
Michael J.
Rental Property Investor · Louisville, KY · Member since 2008 · 342 posts · 123 votes
7y
That's nothing new. Most REA I know don't own property. Being a REA and a REI are two completely different things in reality.
1 Reply
Pawnee Davis
Member since 2019 · 1 post · 0 votes
7y
@Michael Van
Business ownership is always about mindset. I’ve been the owner of my law practice for almost 5 years. You have to spend money to make money.
Personally, I own a house in Fort Washy, MD, and would love one of the following:
1. Investor buys my home and has another one ready that they finished renovating. I would swap out the original for this one.
2. An investor will facilitate a swap. Someone moves into my house and I move into theirs. I would assume a similarly valued house.
3. Other:
Who’s with me to grab a coffee and talk about if this makes sense?
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Angie Syphers
Real Estate Agent · California DRE Licence #01311699 (inactive) · Member since 2017 · 5 posts · 4 votes
7y
@Jordan Moorhead is right that real estate agent school doesn't teach about investing. It's a completely different business. I have always wanted to invest, but when I would ask my brokers or any other agents about investing, I would get laughed at at the thought. That was extremely frustrating so I had to just learn on my own & kept it to myself in my offices. Unfortunately, it was also a huge blow to my confidence so it's taken me many years to get the courage to become serious about investing. It's also true, that you have to like people as an agent, and I used to, but I have been jaded over the years by all the fake people in the business. I mostly work with investors now & I'm finally ready to start investing. I'd rather deal with real, no BS types of people as I have found in investors than the inflated egos in a lot of agents. Not must, but a lot of agents are just too much to deal with.
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Scott W.
Real Estate Investor · chicago, IL · Member since 2012 · 1k+ posts · 231 votes
7y
I'd guess that if you asked a real estate agent if they wanna flip, 90+% would say yes (as would most of the public due these dumb flipping shows on tv).
being an agent isn't gonna make most rich. I sold a home for $188k last month. I'd guess the seller's agent cut was around $2k. most agents don't do a ton of deals. just like sales, it's a tough business.
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Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
7y
Originally posted by @Joshua Dawson:

I would add that - a lot of our markets are simply too expensive based on return objectives. I know Columbus, Ohio is in many instances. The great numbers are found in areas with too much risk in my opinion. That's why I am not putting any money to work right now.
Which areas are you talking about in cbus? i'd be interested to hear
[email protected]786-494-6766
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Michael J.
Rental Property Investor · Louisville, KY · Member since 2008 · 342 posts · 123 votes
7y
Originally posted by @Angie Syphers:

@Jordan Moorhead is right that real estate agent school doesn't teach about investing. It's a completely different business. I have always wanted to invest, but when I would ask my brokers or any other agents about investing, I would get laughed at at the thought. That was extremely frustrating so I had to just learn on my own & kept it to myself in my offices. Unfortunately, it was also a huge blow to my confidence so it's taken me many years to get the courage to become serious about investing. It's also true, that you have to like people as an agent, and I used to, but I have been jaded over the years by all the fake people in the business. I mostly work with investors now & I'm finally ready to start investing. I'd rather deal with real, no BS types of people as I have found in investors than the inflated egos in a lot of agents. Not must, but a lot of agents are just too much to deal with.
Don't let those goobers stop you. You have to do it right but someone being a REA gives them no special insight on being a REI.
I had to deal with the same thing when using a agent to find my first rental, they kept making comments about not wanting to deal with clogged toilets.
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Corby GoadeBusiness Member
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
7y
I know lots of agents who invest. Being an RE agent is like any other profession. There are good and smart salespeople, teachers, waiters, etc, but there are also bad waiters out there- surely you've had a few of them. The difference is that Realtors are all independent contractors, so there isn't always someone there to help them or tell them that they need to improve in some areas. I'm a Realtor and I invest- I work with lots of Realtors who do the same. I think having a license gives you great insight and access to deals you wouldn't likely see elsewhere.
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Susan NaftulinBusiness Member
Rosemont, PA · Member since 2013 · 14 posts · 6 votes
7y
The majority of realtors don't like dealing with contingencies, funding issues, permits, etc. If they did (and some do) you're right, they'd have a huge advantage in the investment game!
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Rachel H.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
7y
@DuBeaux Dingle There are agents who invest and those who don't focusing on only making money as a real estate agent. Some do a little bit of both. It's definitely different for everyone. People have certain risk tolerances. Even if an agent can spot a deal, sometimes they may be too scared to pursue it or feel they don't have enough experience. Hope that gives more insight!
1 Reply
Rob Massopust
Real Estate Broker · Santa Ana CA [South Coast Metro] · Member since 2016 · 459 posts · 202 votes
7y
I leveraged being a top agent into flipping homes myself and made 10x more money. You are right as an agent you get first dibs on alot of properties.
It's a different skill set from agent to investor.
I would buy properties up just to fix and list. Built in listings. Not easy but a good strategy.
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Rob Massopust
Real Estate Broker · Santa Ana CA [South Coast Metro] · Member since 2016 · 459 posts · 202 votes
7y
Originally posted by @Angie Syphers:

@Jordan Moorhead is right that real estate agent school doesn't teach about investing. It's a completely different business. I have always wanted to invest, but when I would ask my brokers or any other agents about investing, I would get laughed at at the thought. That was extremely frustrating so I had to just learn on my own & kept it to myself in my offices. Unfortunately, it was also a huge blow to my confidence so it's taken me many years to get the courage to become serious about investing. It's also true, that you have to like people as an agent, and I used to, but I have been jaded over the years by all the fake people in the business. I mostly work with investors now & I'm finally ready to start investing. I'd rather deal with real, no BS types of people as I have found in investors than the inflated egos in a lot of agents. Not must, but a lot of agents are just too much to deal with.
You are in a good market for investors. Find deals and sell to investors and see what it takes to get one going. you can get hard money to buy a property and fix and list.
Its all relative depending on your market and valuations. Lancaster looks crazy cheap compared to Anaheim and agents and investors in that area are working with the same parameters. It just takes less capital to make a deal work. I remember buying a house in Palmdale years ago and thinking that $60k was alot to buy something. Wish I bought more.
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Rob Massopust
Real Estate Broker · Santa Ana CA [South Coast Metro] · Member since 2016 · 459 posts · 202 votes
7y
If I had a hard money company I would set up a program to help agents flip their own listings.
I know a lot of agents that get deals and they do not even think of flipping. They should
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Kyle NeffPro Member
Rental Property Investor · Cincinnati, OH · Member since 2015 · 127 posts · 59 votes
7y
@DuBeaux Dingle
Great post and I have wondered the same. Just listened this morning to the Michael Blank podcast, EP 164 where they talk specifically about this. Might be worth a listen - there is an industry veteran Bob Helms who provides a lot of perspective on this very subject.
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