RE agent!

25 Replies

Originally posted by @Kyle Stoltz :

So those commissioned agents what do you think a first year agent makes on average?

 A hell of a lot less than what the general public thinks.

Considering there is a 80% drop out/failure rate for first year agents. 

@Kyle Stoltz somewhere I read the average income was around $37K annually for a agent. This is a difficult job to get an average because of the extreme failure rate and the fact that many agents make well over $200K per year. This is a job that you get out what you put in. Don't expect to make very much for the first year and I always suggest having a full-time job while being an agent part time to get started. I still have a full time job and I sold almost 30 houses in 2015. 

it is a mix bag of goodies.
You mention Money and can't hack it. What about the crazy buyers who make you look at 50homes? What about the seller than won't listen to the agent to reduce price?
I could make a huge list of what I've had to deal with in my first 5months. 
Tight-*** investors who nickel and dime a seller for pennies?
Deals falling through because seller did mention they had huge liens against the property?
It takes a lot of thick skin, and in the end that make a commission which then they need to give certain spilt to a broker. 

Pretty sure when you read success stories on BP not much love is thrown to the RE agent who bought the deal to the investor. "It's his job to find me deals, that what he gets paid for" is usually the attitude. 

Hey @Kyle Stoltz , thanks for your question.

That's a tough question and there are several answers.

The average agent (meaning total people with active RE license/total number of homes sold in the US per year) would less than $10,000 per year.  BUT to @Federico Gutierrez & @Jake Thomas 's point, there are plenty who make nothing and some who do very well.

It really depends what you want to do with it and where it fits in the scheme of your overall RE goals.  If it's just a means to an end for finding investments, then that's what it will be.

It's a job, just like anything else, and you get out of it what you put into it.

@Mindy Jensen wrote a great guide on becoming an agent, you can check it out here:

https://www.biggerpockets.com/renewsblog/2015/12/0...

If you haven't already, do this:

Start here. You'll get a wealth of REI knowledge and learn how to take full advantage of Bigger Pockets (including how to connect with other Illinois investors).

Listen to the podcasts , get active on the forums & set up key word alerts to be notified when people are discussing topics you're interested in. 

I'm an active agent/investor, so reach out anytime.

I wish you all the best Kyle!

@Andrew Davis , thank you for the mention.

@Kyle Stoltz , you get out of it what you put into it, like several others have said. During my classes, I kept hearing the phrase Sphere of Influence over and over. So look at yourself, your friends, family, their friends, etc. Do you know many real estate agents? Do you know many people who are in need of a real estate agent? 

Cary is really a fringe suburb, being so far away from Chicago. What does your local market look like?

I agree with @Jake Thomas who said you should keep your day job, but it's tough showing houses with a day job unless you have an awesome boss who is totally understanding or awesome clients who are totally understanding.

The big mistake I think most new agents make, which is why there is such a huge drop out rate is that they do not understand the difference between having a JOB and owning and running a SMALL BUSINESS. Being a real estate agent is running a small business. That means it takes TIME and CAPITAL to become successful. Most small businesses do not turn a profit in their first two years of existence. If you are able to take the long view, and have the time and capital to grow the business, you have a better chance of becoming successful.  If you do not, then you may just be wasting your time and money. But do keep in mind, there are not a lot of businesses you can start with under $25k. 

As someone who struggled in the beginning of my career and now has found success... I would suggest trying to find a successful team to join.  The support, knowledge and education you can gain from those with experience will benefit you immensely! 

I read somewhere that  5% of the agents make 95% of the sales. I think the example given was like this:

$200,000 house @ 6% commission: $12,000 -  nice.

Split in half with listing agent:  $6,000 -  ok

Split in half with broker:  $3,000 -15 showings, nine months, gas, insurance, etc.

How many $200,000 houses do you need to sell to make $100,000 a year?  34 or 2.8 per month. 

Agents work hard. I still will hate to pay as a seller 6% commission on a $400,000 house, but that's another story. 

Originally posted by @Kyle Stoltz :

What does a new real estate agent make on average? I'm considering being one to help with investing so was curious.

 When you say you're considering being an agent to help w/ investing do you mean having access to the tools/resources available to agents to support your investing or actually making $ as an agent & applying it toward your investing?

@Crystal Smith more the ladder. Think I want to become an agent to help with the funding of my investments, but become an actual agent to make money doing it. Think it's going to take a good amount of time until my investing can be full time so thought why not spend my day job in real estate and keep learning about real estate.

@Mindy Jensen if I did this I would do it full time so give it my time. My investment properties could fund my day to day and I have good money saved. I do know quite a bit of people in real estate so that should help. I'm assuming I'm much different then most just getting into being an agent. I have 2 college degrees, spent 8 years in corporate America, ran my own food franchises for 4 years and have experience wholesaling and investing. So hopefully those things help me as I'm a pretty experienced guy in business.

@Andrew Davis thanks for all that information. I listen to the podcasts non stop when I have free time and also just setup keywords. If I do this I would give it my all not just a part time gig so should be interesting. Classes start Feb. 3rd I'm really excited to learn!

Originally posted by @Kyle Stoltz :

Crystal Smith more the ladder. Think I want to become an agent to help with the funding of my investments, but become an actual agent to make money doing it. Think it's going to take a good amount of time until my investing can be full time so thought why not spend my day job in real estate and keep learning about real estate.

 My recommendation if you're going to do it full time, new without a build in clients then make sure you have @ least 6 to 12 months $ reserve set aside to live on.  Maybe more.  It's a business & most business run at a loss before moving into the black.  If you don't have the reserves then find a firm where you can be salaried (Redfin comes to mind).   

@Crystal Smith yeah honestly I would probably prefer a salaried position at least a tiny salary. Should be interesting. School starts for that Feb. 3rd, trying to get a 4 plex now and bought 4 investment properties in 6 months. Just trying to constantly build.

I've had my wife preparing to get her RE license (I work a full-time Corp Job). The intent is not to be a typical agent that does listing/selling but for the purpose of assisting with the better acquisition of investment properties.

I've started to wonder though if getting a license is possibly a disadvantage with all the legal exposure and notifications one must make when buying, selling, and renting your properties. IL real estate law is what I'm talking about. Not sure about other states.

Does anyone see a RE license as a disadvantage when really doing it for improved investment desires? Is it better not to be a RE agent so as not to take on the additional legal burdens surrounding this license?

Thoughts?

Scott

Originally posted by @Kyle Stoltz :

Frank Sanchez what's nice is I live literally right next to Barrington. So if I do well would love to swim in that water as the homes there are very expensive.

I had met very respectful agents. They all work hard. I wish they could lower fees by increasing volume. 

Best of luck!

Originally posted by @Frank S. :
Originally posted by @Kyle Stoltz:

Frank Sanchez what's nice is I live literally right next to Barrington. So if I do well would love to swim in that water as the homes there are very expensive.

I had met very respectful agents. They all work hard. I wish they could lower fees by increasing volume. 

Best of luck!

 I believe I'm worth every single cent of the 7% I charge, it's not just what you see at the front end. The amount of time I spend in the back end, coordinating with lenders, with title companies, discussing with the other agent. You think that's all magically done because you don't see it? 

Originally posted by @Federico Gutierrez :
Originally posted by @Frank Sanchez:
Originally posted by @Kyle Stoltz:

Frank Sanchez what's nice is I live literally right next to Barrington. So if I do well would love to swim in that water as the homes there are very expensive.

I had met very respectful agents. They all work hard. I wish they could lower fees by increasing volume. 

Best of luck!

 I believe I'm worth every single cent of the 7% I charge, it's not just what you see at the front end. The amount of time I spend in the back end, coordinating with lenders, with title companies, discussing with the other agent. You think that's all magically done because you don't see it? 

Read the entire thread.