Updated about 10 years ago on . Most recent reply
REI vs Realtor
What is the biggest drawback/limitation to being a realtor compared to being a real estate investor?
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#5 All Forums Contributor
- Plymouth, MI
OK. Let's talk numbers. For every deal that closes, the REA makes a small commission, and the REI (if they have even the slightest clue) makes more than the REA.
Example: $80,000 closing
REA = $4,800 (6% shared by all REA involved)=>>5/month=>>$288k/yr (1.5% Splitoff = $72k/year
REI = $12,000 Profit (based on a 15% profit)=>>1 flip/mo =>$144k/year
If that property is a hold, the REA makes a one time commission, but the REI makes cash flow every month on that property for as long as they hold it.
Example: Same property
REA: $4,800 (same as above)
REI: $500/month CF = $6,000/yr....every year=>>add 1/month for 1 year=>>$72k/yr1; $144k/yr2; etc...
There's a reason many agents become investors.