PT Real Estate Agent

Real Estate Agent Forums 22 Replies

Being a PT real estate agent with no intention of ever going full-time....good or bad idea? Time consuming? Profitable? Not profitable? any ideas would be helpful...

IMO working as a realtor is only financially feasible if a) you have a spouse who serves as the primary bread winner and the Realtor gig is only to 'help ends meet' and/or you only need the part time income, b) you supplement it with investing, c) you're doing enough volume to afford an assistant (usually reserved for more experienced and successful agents) or d) you're servicing higher end clients ($500k+ priced homes - in which case you're sure to have an assistant).

Additionally, many agents make the mistake of working against market trends. In other words they take on a lot of buyers in a seller's market or vice versa. This only adds to the challenges in making a living as a realtor.

The way it's typically done, with the realtor job being a major (not necessarily 'primary') source of income and servicing first time home buyers (who require a lot of hand holding), it becomes a challenge that causes many agents to throw in the towel and seek more 'secure' employment.

Medium webuynjrealestate bbbIbrahim Hughes, We Buy NJ Real Estate LLC | http://www.WeBuyNJRealEstate.com

Only a tiny % of FULL TIME residential realtors make any real money, so you can imagine that this is not likely to be lucrative to a part-timer. Really, if a realtor is not doing at least $4mm of production, it's not a very good living after factoring in the irregular and long hours, automobile expenses, office and marketing expenses, BOR/MLS fees, self employment taxes, buying your own health insurance, etc. etc.

Have seen part-timers that were exceptional but that is rare. A couple of examples were teachers that had summers free and a great network system. The one lady eventually gave up teaching and became a top producer and then went on to own her own company.

That's actually what I do. 8-4, teacher. 12 wks in summer off. But I do have a family and I need to take that into some consideration. I don't know anyone that does it. Theoretically it's feasible but is it profitable, that's the question.

Any opinions on that would be appreciated.

Originally posted by John Jabson:
Any opinions on that would be appreciated.

If you find a niche, you'll probably be better off. For example, I'm an investor first-and-foremost, but a lot of investors who I know ask me to list and represent them on the buy-side because they know I have the investing expertise. I make a good bit of side income doing this, and don't have to do too much work (no marketing, and the work I do is the same work I do for my own investments, so I'm good at it). By having this investing niche, being an agent part-time is very profitable.

Find a niche and then let your customers find you...

Medium lishproplogoJ Scott, Lish Properties, LLC | [email protected] | http://www.123flip.com

John, are you wanting to be solely a real estate agent or are you interested in investing also?

I work full time in IT and also part time in Real Estate. I work as an agent and also for my own investment purposes. I don't have the luxury of 12 weeks off in the summer, but I do have the luxury of being able to answer my phone whenever it rings throughout the day. I assume you wouldn't have that luxury.

I would recommend finding a broker that does not charge you $100/month in fees on top of 30% or more of your commission. I am with a broker that charges less than $200/yr in fees and only a fraction of each commission check. I feel that is the best setup for a part timer.

I would talk to one of these brokers and get an idea of what all of your fees are (including local, state, and national real estate associations, mls access, broker fees, etc) and figure out how many houses you would have to sell in a year to break even and find out from the broker the likelihood of you doing it. I would guess, depending on the broker fees, selling 1 house a year will be pretty close to your break even point. Or you can consider how many houses you have to buy (if you are an investor) because that is an automatic 3% back for closing costs, renovations, etc that would be going to somebody else if you did not have a license (this was the primary reason I even got my license, so any of the deals I have closed representing others have all been a bonus).

My brother is a pilot and I am recommending he get his license to take advantage of his down time. Of course, it really depends on your market. The Houston area market has been pretty good for me. Being a teacher I think your network will be a huge asset, and they will all understand your time restrictions up front.

But yes, you can draft contracts, schedule showings, run comps, etc after the kids have gone to bed, but be prepared to lose many evenings and weekends to showings.

As far as earnings potential I believe NAR reports that agents make, on average, about $30,000/yr. I think it depends on your ultimate goal. Mine is focused on my own investments and the rest is just a bonus (or at least covers my expenses).

It all boils down to your source for leads. By and large, you will spend most of your time finding deals. That said, if you have a source that will regularly send you deals, not prospective deals, you may be able to go PT and make a living.

@John Jabson there is always a trade-off. You can't go to the beach with your family and fly kites if you are expected to hold a house open on Sundays.

In RE sales there is a sacrifice the family needs to be on board with. This is one of the first considerations for agents of all types. There is a considerable investment of time and there is expense for your car use, classes and licenses.

Teachers many times are naturally good at this but women have a more natural ability to work with the average home buyer. It really has a lot to do with emotions and less to do with the numbers and legalities. Having said this there are men that are top producers in residential so there are no absolutes.

If you are extroverted this business will come more naturally for you. Working with kids has to be taxing, and customers can be as unruly as your more difficult kids.

The people you find that make a bunch of money in their field are always getting better and are at the top.

I do this full time but I do commercial real estate only. I have no interest in ever doing residential. I do mainly retail, apartment buildings, and triple net. I work with investors and also do my own investments as well. For me it is the perfect life and I enjoy it everyday.

From what I am gathering it sounds like you want some additional income during the off months from teaching. If that is the case than yes working with home buyers could give you a few transactions during the main buying seasons. I used to have about 50 agents at my brokerage but eliminated them all.

Part-timers are rusty and generally need a bunch of help plus do not want to pay anything as they think they are the gift to man kind when they almost never close anything. Not to mention the IRS tax demands, child support, education lapses, not paying license renewal fees, delinquent student loans and on and on from agents who have issues.

As you can see it creates a bunch of paper to deal with for a head broker for a little return. It's almost like property management but instead of tenants you are having to manage agents.

I do this full time and have for years. Look for a brokerage that enjoys handling a bunch of agents and likes that kind of thing. My thing is if an agent pays 300 a transaction there has to be a 100 transactions closed for the brokerage before expenses to make 30,000. That is a ton of work for a very low return. At least it is for what I do.

Medium allworldrealtyJoel Owens, All World Realty | [email protected] | 678‑779‑2798 | http://www.AWcommercial.com

So if you were in my situation, would you put your time and energy into becoming a PT real estate agent and building that business OR would you educate yourself on wholesaling and start building that? I live in a rural area with 50,000 in my county. There is a big town of 100,000 about 40 minutes away, but it's very competitive. My immediate area is kind of backward, but there are quite a few good investment opportunities for rental properties and flips.

I'm just trying to find a way to fill my off-time so I can make some extra dough. I have experience in flipping (2 houses) and landlording (2 properties). Not real experienced but not a total newbie.

@John Jabson you are experienced and knowledgeable. Becoming an agent sounds ideal. Financially the investment and risk is small and the potential rewards could be high. I say do it.

Thanks, Jeff S. Anyone else have an opinion on this?

You can get your license and do your own investments. I don't really know that you will want to go to listings appointments on the weekends or late at night. Residential real estate can really mess with your family life and odd hours. I personally love commercial and have regular hours and can make my own schedule.

If you love teaching and do not want to change careers then I would stick to your own investments and occasionally be selective and take some investor business on your terms. This way you keep your family life intact, make some investments, and pick up some residual income.

Medium allworldrealtyJoel Owens, All World Realty | [email protected] | 678‑779‑2798 | http://www.AWcommercial.com

Joel-I really don't know what you mean by "your own investments." I dont' have a ton of extra income to throw around. I only bring in an extra 1500 a month, net. Please explain what you mean by that. Isn't being a listing agent what an agent does, primarily?

It's all about what space you transact in. I know residential agents working on 50,000 houses for short sales and will go through the ends of the earth to only get maybe 1,200 check after broker split and months of time and seller drama.

They get multiple sales like that going and at best are making 4k a month closing 3 deals every month.

If you were in commercial leasing you would have ongoing residuals.
With me in commercial the sales price is generally in the millions. In my view you really can't do something like commercial part time. This is why I asked if you were happy with teaching or wanted to change careers or were fixing to retire??

Most new agents are not listing agents as you do not have the track record yet to pick up business so you are mostly regulated to working with home buyers. Generally the first timers who want to see everything under the sun and do not know what they want.

Medium allworldrealtyJoel Owens, All World Realty | [email protected] | 678‑779‑2798 | http://www.AWcommercial.com

Yeah, I have no desire to change careers. I just like real estate and would like to have a side income/job. That's my objective. I know alot of people in this county through being in the school district so I think I have a decent network going. At this point I'm just throwing around the idea of getting a RE license and see what happens.

@John Jabson

I used to work at a real estate brokerage and the vast majority of agents made almost nothing and all except one that made good money were full-time. We had around 70 agents, so not a small office.

As others have said this is definitely an area where females dominate. All of our top producers were females but there were some very successful men at other offices. In fact the owner was a man and had several other offices, an incredibly successful real estate sales team, along with a number of other business. His wife was his partner though, lol.

With that said you are in a position where you could have a good network between other teachers and parents. A decent flow of leads is key to make any money. Agents are really in the business of marketing themselves, not selling homes, marketing homes, negotiating, or helping buyers or anything else.

It doesn't take a whole lot to get started so I say go for it. Just go into it with your eyes open. If you have any interest in investing it can be very helpful to have your license.

I'd say go for it if you have the extra money to spend on licensing requirements/classes. If you sold your friends and family a couple of houses over the next couple/few years it would probably at least come close to paying off your expenses. Then if you could sell 1 every year or two you can keep up with the yearly costs until things started picking up. Trust me, it's not hard, and you probably have a better area of influence than I do. Also, if you want to invest more in real estate then you've got an automatic 3% on the front end (when you buy) and 3-6% on the back end (when you sell), minus broker fees. I would look for a 100% commission broker in your area (preferably one that provides some sort of training for new agents). I wouldn't pay 30% commission to a broker unless they were providing you with leads. Get your license and then tell everybody you know and everybody you meet here on out that you are a real estate agent.

Really interesting discussion -- thanks John for the post and to everyone for commenting! Tim Czarkowski said "If you have any interest in investing it can be very helpful to have your license." I'm curious if he, J Scott or anyone else could elaborate on this. I've been wondering about the wisdom of getting a real estate license as well, although my particular situation is different than John Jabson's. (FWIF John, I think you should go for it) I'm a commercial lawyer (deal with contracts all day, though not for real estate) and may soon ramp down my practice, so I'll have more time to devote to real estate investing and other family responsibilities. (Not to worry, I'm not the primary breadwinner!)

We have 3 long term rentals plus a vacation rental in the mountains that I manage myself and am looking to do more investing (likely more buy and hold). Getting my license, particularly as a lawyer, seems easy; the question is whether I'd really gain much given that the sole point would be to make it easier and more remunerative to handle my OWN transactions (e.g., ~3% commission on the buy side). My husband argues that you can always make an offer without a buyer broker and try to shave 3% off the price, but I think sellers' realtors really dislike being a transaction broker and in a competitive situation you don't see a price reduction. I see advantages to an automatic commission (even if some is kicked to the broker) and running the buy side of my deal, but I don't know if they are enough to offset the costs.

So what are the benefits to being a licensed realtor if your primary (or sole) goal is to do your own real estate investing? Or is getting the license not worth it if you have the knowledge, experience and comfort with contracts, negotiating deals, running the numbers, etc?

Thanks in advance for any insight!!
Shana

PS, newcomer to BP -- this is a great forum!

Originally posted by @Shana Solomon :
... I've been wondering about the wisdom of getting a real estate license as well....

So what are the benefits to being a licensed realtor if your primary (or sole) goal is to do your own real estate investing? Or is getting the license not worth it if you have the knowledge, experience and comfort with contracts, negotiating deals, running the numbers, etc?
...

Shana Solomon -
Rather than veering this topic off course, perhaps you could read some of the existing threads on that topic, and even post in one of those as you see fit:

http://www.biggerpockets.com/forums/55/topics/39235-new-member-from-phoenix-az?page=1#p197178

http://www.biggerpockets.com/forums/12/topics/74926-agent-or-not

http://www.biggerpockets.com/forums/84/topics/70385-should-i-get-a-real-estate-license

http://www.biggerpockets.com/forums/12/topics/46902-real-estate-liscense-

http://www.biggerpockets.com/forums/12/topics/55355-getting-re-license-a-bad-idea-regulated-

http://www.biggerpockets.com/forums/93/topics/51809-what-are-the-pros-and-cons-of-being-an-agent-and-a-wholesaler-

http://www.biggerpockets.com/forums/12/topics/72934-pros-cons-to-an-rei-getting-rea-license

http://www.biggerpockets.com/forums/12/topics/17147-should-i-get-a-real-estate-license-

http://www.biggerpockets.com/forums/16/topics/43954-realtor-s-license-good-or-bad-will-or-others

http://www.biggerpockets.com/forums/48/topics/41386-re-investing-career-strategy

http://www.biggerpockets.com/forums/93/topics/40174-what-s-in-a-name-

Steve,
Thanks for the links -- I will check them out.
Shana