Become an Agent or Not? - Posted by JesseTheNewbie

Real Estate Investing
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Posted by Jason (SC) on November 01, 2004 at 11:31:49:

Most of the bigger names are independantly operated, or atleast here they are.

for example you could have one XYZ office that has an awesome program, nice office, offer a ton of training and it a great place for a new person to start. then you might go the next town over and thier XYZ office’s program is horrible for new people.

For myself these were the most important things I asked about

  1. Marketing - does the office market itself to build its own brand image? You will have to market your own self, but if no one has ever heard of your office it could be tough. Your marketing your business not the offices

  2. Training - even if I decide I don’t want to do it, i would like to know what is offered. AS A NEW AGENT THIS MAYBE YOU #1 QUESTION

  3. Desk fees/commission split - its always good to know what part of the deal your going to be getting

  4. E & O insurance - its like health insurance you may never use it but if you need it one time it was well worth it.

  5. How many properties did the office sell last year? - You don’t want to go to an office with 20 agents that only sold 10 properties last year

I’m sure there are more things you would want to ask about too. These were just the 1st 5 that came to mind. Of course these are just my opinions. If you want some information on some of the bigger names, send me a private e-mail and I can give you some info from my personal experiences. At one time or another I think I have seen the majority of the bigger names recruitment packets

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Become an Agent or Not? - Posted by JesseTheNewbie

Posted by JesseTheNewbie on October 30, 2004 at 18:36:07:

Hello Everyone!

I’m 23 years old and currently trying to “find my place” in this crazy little thing called life. I have always been drawn to anything have to do with houses and the world of real estate, but for some reason never really thought of it as a viable career option until recently. I am going through a lot of changes in my life, and through self examination I have been thinking of becoming a real estate agent. Right now I live in NY state and live at home with my parents, take classes at a school I’m not really liking a few days a week and haven’t found my career/path yet. However, I am thinking of making some major changes in January and moving to South Florida. (Miami/Ft. Lauderdale area). Once there I thought I might get my real estate license and try becoming a realtor and see how that works out. I have some major aprehensions and questions about this though, that maybe some of you can help me with?

For right now, I’m young and have almost no savings and immediately need some CASH FLOW. Obviously, after reading books like “Rich Dad Poor Dad” and not wanting to be a minion in corporate America slaving away for minimum wage, I’d eventually love to work for myself and become a real estate investor, rather than an agent. Although, for right now even the thought of becoming an agent while moving to a new place seems risky b/c I have heard it can take MONTHS before you make your first sale/commission, and at 23 obviously I’d like to have a penny to my name already. But in any event, there are some pluses and minuses of becoming a real estate agent and I just wanted to know if any of you had any thoughts/advice on this topic. For me, I feel that the knowledge gained from working within the field would be the most beneficial thing of all - to be able to learn the different terminology, to be able to figure out realistic comps for whatever area I am working in, and probably most of all - to build up a repor and network with the various people who are in the RE field…such as other agents, mortgage brokers, lenders, title companies, real estate lawywers, and the like - that alone seems invaluable to me when someday I need to have those contacts to lean on in my own REI business. There is also the fear that I have heard becoming a real estate agent can actually work against you…in terms of you having to disclose to everyone you do a real estate transaction with that you are a licensed real estate agent/broker, and many distressed homeowners will not want to deal with you. I’m sure there are other legal remifications that make it harder for you - and let’s face it - who wants to make it harder for themselves to succeed in something?!? I’d just love to hear about any suggestions anyone has about this topic. I’ve read a few posts on the pros and cons of becoming a Real Estate agent as it relates to REI and heard from both schools of thought…but I’d love to hear what the investors in this online community think.

As far as some background on me, 2 weeks ago I attended the 1st annual New York Real Estate Wealth Expo at the Javits center in NYC. It was amazing and really lit a fire under my belly (or however that saying goes, haha!). It was very intimidating in a sense, as I have never worked in the RE field before and didn’t know many of the speakers or the terminology they were using, etc…but I felt myself acting as a sponge…just wanting to learn, learn, learn more information and soak it all up! I really felt something “hit home” with me, that I could work in this industry and love it, but that there is a HUMONGOUS learning curve to go through. And everyone also had conflicting thoughts on how to be successful in REI, which of course confused me all the more, haha. I broke down at one point and bought a course from a speaker there and spent money that I really don’t have right now. I mean, I’m trying to save up for a big move and possible lifechange and new career in January, so I felt very wrong buying this course…but if it somehow helps to keep my motivation going until I can invest in REI then maybe someday I can see it as a high return on investment! :wink: This weekend at the NY Wealth Expo really changed my life, and now I’m finding myself wanting to chanel this energy when I move, and my question is basically…is it better to try becoming a real estate agent and earning some income that way and learning about the field and, then using that knowledge, becoming an REI or not? Would it make sense to work some kind of 9-5 that doesn’t pay well and using that money invest in a property of my own and move at a slower pace in getting into the investing world? I feel like there is too much of a learning curve for me to just move 1,000 miles away and try to find a motivated seller and know what to do…at least right away, while I need some cashflow to get settled and still have so much to learn. Any suggestions are GREATLY appreciated!

Thank you all so very much for being such active members of this community, for any response you have to give, and of course your support! Happy investing everyone! :slight_smile:

~Jesse

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Re: Become an Agent or Not? - Posted by Jason (SC)

Posted by Jason (SC) on October 31, 2004 at 15:25:01:

I am an agent. If your are very new to the business definatly go get your Re liscense or atleast take the course. It will bring you up to speed on a lot of the local state laws and give you an over view of some basic contracts.

My experience with being an agent is a lot of the people you need to succeed in this business will be contacting you, instead of you trying to find them. For example I work with, In my opinion, some of the best mortgage brokers in the state. I didn’t make one phone call or anything to find them, they came to my office. I also work with a brilliant RE lawyer, same thing, he called me first. As a result I have some very good relationships with some very smart people, who I rely on, and they did all of the initial work to build these relationships.

When i first started I went and interviewed different office and found some very smart people to work with there, that this was thier business and they made very good livings from working in RE and investing.

I’m sure I don’t make near as much as some people on this board and I’m sure I don’t have near the experience. But I’m constantly learning and I feel like to date, I have been pretty successful. In my association we have 2800 agents. I don’t think it is so much about competition as it is about working smart and constantly learning.

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Re: Become an Agent or Not? - Posted by Natalie Smith

Posted by Natalie Smith on October 31, 2004 at 15:24:06:

I am a Broker and an Investor. I think it’s been invaluable to have the license. I first took the salesperson’s classes and exam and worked under someone else for 3 years (the requirement in Virginia). Then, I took the broker’s classes, and that exam. Now I have my own firm so that I don’t have to pay commission to anyone else. I get it all! I sometimes list and sell for clients, but mostly I list my own rehabs. My properties get maximum exposure on the MLS, and I only pay the agent that brings the buyer.

I’m not concerned about disclosures. So, I have to tell someone I’m a broker and have an ownership interest in the property…so what? I’m not hiding anything. You have to disclose known hidden defects whether you are licensed or not, so it’s not been a problem for me. Other disclosures (lead based paint, etc.) are also required by all sellers, not just those with a license.

I don’t think having more education can hurt. It also helps me to stay on top of any new requirements that come up (mold disclosures, etc.)

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Re: Become an Agent or Not? - Posted by Stewart

Posted by Stewart on October 31, 2004 at 14:21:16:

I don’t know I have a lot to add. I will say, it may not be expensive to take classes. There are online schools for classes with costs under $400 for all you need. I have decided to go for a broker’s license after taking and passing my saleperson’s test. In Missouri, the only requirements for getting a broker’s license is passing the salesperson’s test and the broker’s test (and then applying of course). There is no time requirement. Of course, making money as an agent or broker is another matter. For me, while my focus is on investing, I like to have as many tools as possible. I currently have MLS access through a friend but don’t want to rely on that forever plus as a broker, there is more potential. Best advice I have ever seen, read everything you can on this site, and then read some more. Also, join a local REI club and get to know other investors. As much as you want to make money right away and while some get lucky right away, investing is not a get rich quick way to make money. Once you do your homework, the sky is the limit.

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Re: Become an Agent or Not? - Posted by ~~Beachboy-Ga

Posted by ~~Beachboy-Ga on October 31, 2004 at 05:35:08:

I spent one year in a sales position working under a broker in an real estate office.I was automatically competing against 125 sales agents and other companies in a small town.Being an agent, if you plan on buying and selling realestate also, you will have to disclose more info on your properties than just being an investor.I enjoyed the time I spent in the “SEAT” and learned alot, but now I find several agents in the market and allow them to work for me hunting properties priced to buy, and I spend my time buying and selling.Your not having to compete for your paycheck against 125 other agents.You make money buying realestate, not brokering it.

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Re: Become an Agent or Not? - Posted by Mark

Posted by Mark on October 31, 2004 at 01:24:36:

Wow… takes me back…

I was in the same position as you are back when I was even younger than you. I became a real estate agent at the age of 19 , and I have to tell you… it’s had its ups & downs, but I wouldn’t trade it for anything.

I started investing in real estate in 1986… 2 years after I got started in the business. Two years is about what it took me to really get into a groove for sales. I started investing by leaving my commission into about half my deals.

These days, I have a great portfolio, but I still love real estate brokerage, and I still net over $200k a year from it. I honestly wouldn’t leave it for anything. I still leave my commission in several of my deals every year, and I buy about 12-16 properties by myself every year. Marketing/prospecting is the biggest key for both businesses… if you don’t have a constant influx of motivated sellers, you don’t have deals.

Bottom line is… do what you love. If you don’t have real estate in your heart & soul, do yourself and all of us a favor and stay out. If you get in, get all the way in and stay in… even through the times when you feel you’ve made a mistake. You’ll never be mainstream… you’ll never have a “real job”… you’ll never be comfortable… but you’ll never be sorry.

Mark

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Re: Become an Agent or Not? - Posted by Dick Chelten

Posted by Dick Chelten on October 30, 2004 at 19:34:31:

stay in NY and live with your folks while you learn either the real estate sales biz or the real estate investing biz. both can be a real drain on your cash flow until you become successful at some niche within either industry.
You are too all over the place in your posting. I’m afraid that until you become more of a student of CRE, you’re just dreaming. Not that dreaming is bad, but go through the archives here and study what has been recommended for new investors. make a plan and start moving. Remember, you are just 22. Invest 5 years in this biz and you’ll still be only 27. What most of us wouldn’t give to be in your position.
Oh, yeah, and join your local REI club. Get others opinions in your local market. good luck.

Dick Chelten

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Re: Become an Agent or Not? - Posted by DP (ON)

Posted by DP (ON) on October 30, 2004 at 18:57:26:

It may be different in your area, but around here I see a lot of agents who are limited by regulations and education in what they can do, and so it becomes virtually impossible for them to differentiate themselves from the sea of other agents. Competition is fierce and overhead is high.

There’s really only one reason to become an agent: Easy MLS access. Paying 50% of your income to a broker, or $1,000+/mo in desk fees just to access the MLS seems excessive to me.

In my area becoming an agent typically takes 6-12 months and costs about $4,000 for the courses and initial fees. So that’s another thing you will want to consider.

The actual buying and selling of property can more easily be accomplished as an investor because you do not have the same legal restrictions and you are not limited by what your client instructs you to do.

Also as an agent your profit is always limited to a certain percentage regardless of whether the house is under or over market value. But as an investor if you get a house under market value, you can make much more.

That’s my two cents :slight_smile:

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Re: Become an Agent or Not? and Franchise/Boutique - Posted by JesseTheNewbie

Posted by JesseTheNewbie on November 01, 2004 at 08:43:49:

Jason and everyone else - thank you so very much for the advice…I asked for it, and I certainly got it! :slight_smile:

I definitely want to become a real estate agent, and I shouldn’t let the time it takes to get “set up” and the learning curve scare me off…b/c I want to do it with a passion and put myself wholeheartedly into it, and learn as much as I can. I know I have “what it takes”, just that it will take time to get myself established…and that is fine with me. It’s good to hear most of you reaffirmed my assumption that at the very least becoming an agent gives you access to some incredible people and industry insiders…that is invaluable when the day comes for you to need contacts/networking for your own investing, yes?

My other question related to becoming a real estate agent is whether or not any of you have an opinion on, when starting out, it is best to go to work for one of the big corporate franchises (such as a Century 21), or to try and find a boutique/independent broker and real estate office. I’m sure in either case, the place you work at is only as good at the broker/employer/and co-workers, but I was wondering if there were generally any tips in if you would learn more/earn more/have a better experience in one of the two? Okay thank you for asking this question too! :slight_smile:

I SO APPRECIATE ALL THE ADVICE EVERYONE, THANK YOU FOR INSPIRING ME! :slight_smile:

~Jesse

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Re: Become an Agent or Not? and Franchise/Boutique - Posted by Natalie Smith

Posted by Natalie Smith on November 02, 2004 at 13:42:38:

You hit the nail on the head…“the place you work at is only as good at the broker/employer/and co-workers”.

Everyone has different goals. Your goal is probably to get an education, so choose a company with a formal training program. Most of these in my area start off with a 50/50 commission split. There are many companies that just charge a fee per transaction which can be much more lucrative for you, but won’t get you the training.

I went with a 50/50 company with formal training and weekly sales meetings for 2 years. Then, I went with a small company for one year which gave me a much more generous split, but no frills. Then I went out on my own.