All Forum Posts by: Joseph Parker

@Daytyn Ragragola May I ask where your properties are located in Indiana? 

@Ron Sohn Congrats! May I ask where in Indiana your investment property is located?

@Doug Phillips I've lived in Kokomo, Indiana all my life and in the last five years or so that I've paid attention to the local rental property market, I've realized that Kokomo is somewhat of a hidden gem for investors. While the area is still fairly heavily dependent on the auto industry (Chrysler, Delphi & GM are three major employers), there has been a lot of growth and development in the downtown area. Depending on what your focus is (SFR, multifamily or larger apartment buildings), there are a decent number of options with monthly rents exceeding 2% of price in many cases. There are also a growing number of dependable property management companies in the area.

@Jake Fugman Neither broker mentioned a cap. I'm not too familiar with that, but what you're saying is (using Brokerage #2 for example with 50/50 split and lower monthly fees) that once they take X amount of your commission during the year, you would then get to keep 100% of all commission from that point on and they would take nothing besides their small monthly fee?

My assumption is that with the 95/5 split of the first brokerage, there wouldn't be a cap based on the current structure but I will definitely ask. 

I also realize, or have been told, that everything is negotiable so while I would prefer to work for #1 as the owner/managing broker is like family, they are a national company with better lead-generating systems, education, etc., the required monthly fees starting out are intimidating. I've considered asking if the fees could be lowered for a certain period of time in exchange for a smaller commission share while I learn the industry, then go back to the original terms next spring when the market picks up and I will have hopefully built a solid foundation. Therefore I wouldn't feel like I'm digging myself a whole starting out in fall/winter months when the market slows here, meaning less chances of sales yet still required to pay the monthly fees.

Over the last month or so, I took the required 90-hour broker pre-licensing course online, passing the course and also the Indiana state exam just last week.

My plan is to never quit my W2 job, as I have a good, steady income, insurance, 401k, profit sharing, etc. Additionally, I have a decent amount of flexibility at this job and experience large periods of downtime on a daily/weekly basis. Therefore, the goals I have for using my license are to fill in that downtime by acting as a broker. I've always been interested in real estate, have sold a couple of my own homes by owner, owned and managed a 24-unit apartment building with partners and own a couple of small commercial rental properties in town.

Here is where I need some opinions, advice or experiences from any seasoned agents & brokers...

I've spoken to two local brokerages this week about their general operations, fee and commission structure. Below is how each is structured.

#1 - Fees are billed monthly and would average roughly $1,200/mo. Commission split is 95/5. National company, locally owned franchise. I've known the owner/managing broker for over 20 years and she has always treated me like one of her own kids.

#2 - Fees are billed monthly, much smaller at roughly $200/mo. Commission split is 50/50. Local company. Not very familiar with the managing broker here but both agencies have good reputations.

Most agents looking to do this part-time are obviously scared of the obligation to pay the $1,200/mo regardless of how much volume they do. However, for someone who is confident they can sell above the breakeven point to cover those fees (which would be about $500k in volume annually in a region with average home prices of $100-120k), the income potential is much greater with the 95/5 split. There are numerous part time agents in this area doing in excess of $3 million annual volume.

I know this comes down to my own goals and risk tolerance, but do any of you have an opinion or advice when deciding who to go with? My personality type is one that would result in me being as active in real estate as some full-time agents are, and the busier I am the more efficient I become. I've lived in this city since I was born, know the area well and have numerous connections, so I feel like I'm set up to start off as well as anyone else would be.

At the end of the day, I also realize I'm not stuck at the first brokerage I choose and could always switch if one place is not working out as expected.

In Kokomo, Indiana $200k today could get you roughly five B-class single family homes with rents between 550-650/mo. 

Or maybe an 8-unit apartment building B/C class. 

Or if you're looking at your own personal residence, $200k could easily get you an all brick home, 3,000+ sq ft built in the 90's or newer on multiple acres of land - and this is true even today with high prices.

@Steve Bracero thanks for your input!

I’d say my biggest concern is spending the money and time to get my license, then not finding a local brokerage who wants to hang my license or partner me with a more experienced agent for a few deals to learn and gain experience. There are a handful of brokerages in town so maybe my best bet would be to contact each one and see what their thoughts are regarding part time agents and if they’ve employed them in the past.

Numerous times throughout the past few years, I've strongly considered taking the 90-hour course/exam to earn my license here in Indiana, but have heard mixed opinions from local agents on whether or not it would be feasible, beneficial, profitable, etc.

I currently have a W2 job as Controller of a midsize beer wholesaler that I do not plan to leave any time soon. The "issue" I'm having as of late is that I've automated a decent amount of the work processes here, which leaves me with a lot, and I mean a lot, of spare time on a weekly basis. Therefore, I get bored and spend a lot of time on sites like BP trying to expand my real estate investing knowledge! LOL. Also a lot of time spent trying to thing of other passive income streams along with jobs that I can do from my computer at work, which have evaded me thus far.

The question I have for you all is a list of the pros & cons of gaining my real estate license to use on a part-time basis.

My job is flexible in that I can leave the office to make appointments nearly any time of the day and am able to answer phone calls. My boss/owner of the company would not get upset and actually encourages me to get involved in various groups and organizations in town knowing it will take up some work time here in the office.

It obviously costs money to take the course and exam, then I need to find a brokerage to hold my license, correct? What are the average annual fees to maintain the license? Would it make sense for me to primarily act as a selling agent which means less time spent compared to showing buyers multiple homes? Do brokerages frown upon part-time agents or would they welcome me with open arms and team me up with an experienced agent for a few deals to learn the ropes? Would it just take one or two sales to break even on those annual ongoing costs?

I'd also use my license for my own investing purposes, of course, if opportunities ever present themselves in my market.

Any opinions or experiences would be greatly appreciated!!!

Numerous times throughout the past few years, I've strongly considered taking the 90-hour course/exam to earn my license here in Indiana, but have heard mixed opinions from local agents on whether or not it would be feasible, beneficial, profitable, etc.

I currently have a W2 job as Controller of a midsize beer wholesaler that I do not plan to leave any time soon. The "issue" I'm having as of late is that I've automated a decent amount of the work processes here, which leaves me with a lot, and I mean a lot, of spare time on a weekly basis. Therefore, I get bored and spend a lot of time on sites like BP trying to expand my real estate investing knowledge! LOL. Also a lot of time spent trying to thing of other passive income streams along with jobs that I can do from my computer at work, which have evaded me thus far.

The question I have for you all is a list of the pros & cons of gaining my real estate license to use on a part-time basis.

My job is flexible in that I can leave the office to make appointments nearly any time of the day and am able to answer phone calls. My boss/owner of the company would not get upset and actually encourages me to get involved in various groups and organizations in town knowing it will take up some work time here in the office.

It obviously costs money to take the course and exam, then I need to find a brokerage to hold my license, correct? What are the average annual fees to maintain the license? Would it make sense for me to primarily act as a selling agent which means less time spent compared to showing buyers multiple homes? Do brokerages frown upon part-time agents or would they welcome me with open arms and team me up with an experienced agent for a few deals to learn the ropes? Would it just take one or two sales to break even on those annual ongoing costs?

I'd also use my license for my own investing purposes, of course, if opportunities ever present themselves in my market.

Any opinions or experiences would be greatly appreciated!!!

This may be a dumb newbie question but I haven't run into this before.

A local commercial property is listed for sale by owner. I reached out asking for more information and willingness to sign a non-disclosure if necessary. The seller stated to me the asking price and requirement of me to submit a Purchase Proposal so he/she can have an idea of economics before sending me any current lease information.

Just curious to know what exactly the seller is asking me to include in this Purchase Proposal...?