Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
10y
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...
Investor · Port Colborne, Ontario · Member since 2013 · 137 posts · 31 votes
10y
I've been on both sides of the coin as an investor (mainly house flipper) and having owned a few rentals. My partner was licensed as a Realtor 3 years ago to help our investment/rental business and now after 3 years she is doing very well as a Realtor.
We didn't plan it that way, but I'm a kick butt marketer too that used my skills to place her atop a huge pile of mediocre agents by differentiating through the use of her unique experience. Now I'm an agent too...
We were doing 4 flips a year and doing all the work. Now our plan is to carry on with both, but as many people stated, not doing the work puts us in a more passive situation to free us up to make more money in total.
The only downfall of having your license is the rules and regulations that do, to a certain extent, tie your hands. I can't be as bold as I was without my license and I have to conduct myself very carefully for fear of breaking confidentiality, etc.
It's been an incredible one-two punch for us and the sky is the limit in my opinion...like Gary V, my favourite marketer/social media guru would say. It's all about the hustle. You have to put in the work, learn the necessary skills, then put in more work by doing it smarter every time and crushing it!
Minneapolis, MN · Member since 2014 · 332 posts · 288 votes
10y
FWIW -- I know several investors who have a personal net worth of $50 million + and make several million a year in passive income. I know 0 realtors who have similar net worth or passive income.
Investor · Port Colborne, Ontario · Member since 2013 · 137 posts · 31 votes
10y
@Aaron Fox I mean that the rules we have as Realtors make it more difficult to navigate. We have to be careful what we say, how we speak of others, can't abuse our access to privilege information, etc. I'm not as free to speak openly and from the heart like I used to with potential leads. I have to think before I speak to avoid breaking any rules and protecting my license.
@Account Closed I know a few Realtors with high net worth and great passive income, but they are all like me doing both. It just makes sense. The bonus for me is I get to help others with my experience which is tough to find in a Realtor. They don't teach you this stuff in school LOL!
Investor · Port Colborne, Ontario · Member since 2013 · 137 posts · 31 votes
10y
@George Wolf Still trying to figure that out! No one has ever differentiated that for me. One (in my opinion) is a great marketing tool for NAR that they pulled out of thin air and tried to make us all look like we know what we are doing...the other is how almost everyone talks about us and how we are really viewed. It's a negative reputation industry, much like the automotive business when I was a auto repair shop owner. You're mistrusted before you even open your mouth. Real estate agents are right up there with car salesman and it's our job to prove otherwise, but I like to think some of us manage pretty well to differentiate ourselves from the crowd.
If you figure it out please let me know LOL!
@Aaron Fox I could probably get in trouble for what I just said...it's a fine line, but one I'm rather expressive about due to years of frustration of dealing with other so called Realtors. Figured it be easier if I just did it myself. Worth the money and time to get my license and now I get the perks of access and some extra money for helping other do what I like to do...buy property ;-)
Yeah I definitely agree. I want to get my license to get that extra money and access to the MLS and other tools. I'm going to take the class in July, but the only thing for me is I don't want to work for a realtor company. I want to run my business but have the knowledge and tools realtors have.
Real Estate Agent · Durham, NC · Member since 2013 · 81 posts · 39 votes
10y
I am an investor in NC, currently getting my real estate broker's license (broker only state). As an agent you can set up your own showings, pay less in commission per purchase, write your own offers. Also, you must have your license in order to manage property for other people for compensation. Now, in comparing the profitability of managing your own properties vs. managing the property of others, managing your own will certainly bring more dollars per hour. However, you can make money managing properties without any skin in the game.
Realtor · Atlanta, GA · Member since 2015 · 95 posts · 31 votes
10y
@Aaron Fox This is such a timely post, since I just passed the GA state exam. Initially, I didn't think I had the time to get my license, while working a full-time job. But, I devoted my every weekend to studying for the exam. Although, it may have taken me a little longer to get through the course, I managed to finish -- now, it's behind me. I'm hoping that my license will help me in earning some commissions to buy rental properties -- which is why I wanted my license in the first place.
Investor · Port Colborne, Ontario · Member since 2013 · 137 posts · 31 votes
10y
@George Wolf Cars sales is a tough gig! You can do well at it just like real estate. It's all about relationships. Building the trust and rapport is tough though when you're already considered a scoundrel by the general public. My partner and I only licensed ourselves to further our investing career...turns out we love it. We get to help others and we get compensated for our efforts. Our experience is what makes people love us so much. Who would have thought...