Starting out with no funds. Should I become an Agent?

Question

Hi everyone!

I'm looking to start investing ASAP, but I have absolutely no money. I work at starbucks, and have some money saved in 401k, but honestly it's not going to be enough. Have a car that's too old to drive for Uber, however I think i could get a deal on a newer car to start making money on the side to start saving up.

My question is this: Should I start trying my hand at becoming a real estate agent to bring in some initial funds? I don't think I want to be a full time agent for the rest of my life. I want to become a landlord with multiple rentals. What paths do I have available to start learning some aspects of investing while also making some side money to use for deals? I want to eventually phase myself out of being an agent and go full time landlording.

What are some downsides to becoming an agent while also trying to be an investor?

Tyler McKaig · Answer

I'm assuming you don't own your own home.  My suggestion would be to work any job that allows you to save up enough for a down payment, then buy your first property.

If becoming an agent gets you there faster, fine.  If you don't think you will enjoy being an agent, don't do it, you won't be successful.  Get a higher paying job than Starbucks, or spend less.

Depending on your location, putting a minimum down payment should not be that hard.  Your first "investment" should be to start building equity in your own home.  When you start to build credit and have equity, your options will open up.

Anthony Angotti · Answer

Hey @Sam Epperson

That's not a bad idea, but also know that being an agent isn't exactly cheap! There are a number of costs associated with just maintaining your license.

There aren't many downsides (especially because you can essentially see properties on your own schedule, not your agents), but there are some. One is the cost just to maintain your license. The other that could be seen as a downside is that to avoid losing your license or getting a fine you have to be more careful about what you say. You also have to abide by the rules of your commission.

We can talk more if you'd like because that's a very very brief overview, but I think there are easier ways to make money than being an agent if making money is your only goal.

Joel Owens · Answer

If you do not want to be an agent then do not be an agent.

Find out what part of real estate you like ( commercial,residential, land, rehabbing, holding rentals etc.)

Then find your local investment club and look for highly successful investors in that niche. Go work for them so that you bring in income from a job but learn the business also. Save up some cash and get them to partner with you on a deal to get started with your first one. Their experience will generally tell you if you have found a deal or a dud as they will not want to partner on a marginal deal.

Brandon L. · Answer

@Sam Epperson right now it seems you are grasping for any perceived solution to the no money problem.

I would work on getting setting up a foundation. That would involve sticking with your job, and cutting expenses so that you can increase cash reserves. Boosting credit score so you can have access to credit. Not spending money to make money(do not buy a new car to drive for uber) work with what you have available.

Take baby steps to become a licensed agent. While you are taking these baby steps take the time to learn basic sales skills that will allow you to hit the ground running once licensed. Then sell your ass off. In 12 months with hard work you could be bringing in some serious cash.

Deren Huang · Answer

@John Ford

Everything is negotiable when it comes to commissions, but it is very likely that for the sale of a house a broker will take a part.

Now... leasing out your own rental, it is uncommon to split with your broker, unless you use their resources or leads.

Russell Brazil · Answer

Becoming a real estate agent is more akin to starting a small business than getting a job. I tell new agents they should expect to spend at least $10,000-$12,00 in their first year.

Barb Getty · Answer

Definitely wouldn't recommend starting out in wholesaling .... tough way to go as a beginner. Study, network, save up, and find a few mentors who lift you up. You can do this!

(Wouldn't recommend starting out with the "becoming a realtor" thing either ... so many hidden fees to be paid.)

Been doing investing over 20 years now and started with little money, no knowledge and no credit ... check out www.thelandlordchronicles.com if you have a minute. It will give you hope! Best of luck in your journey!

Theresa Nicoletto · Answer

Ty Webb: Just be the ball, be the ball, be the ball. You're not being the ball, Danny.

Danny Noonan: It's hard when you're talking like that.

You want to be an entrepreneur, right?

That means YOU need to take action and make stuff happen for yourself!!

Your local REIA isn't having a meeting isn't having a meeting until Jan?

I checked Meetup dot com and there are 4 real estate meetups within 50 miles of you.

The Indiana Real Estate Investors Group has a meeting on 12/13.

The Bloomington Real Estate Investing Meetup has 50 interested members BUT NO LEADER!

Step right up! Take it over - look at other successful meetups around the country and copy them (I hear it's the most sincerest form of flattery!) Don't reinvent the wheel but do execute on vision. The nice thing about leading something is you can organize it according to your schedule.

Another great thing to do is ask people who have started REIAs in their areas how they did it. Where to start... and best practice ideas. You can find those wonderful folks on... wait for it.... Bigger Pockets!!!

If it seems like too much, ask on BP for someone to help  you with it.

Sam Epperson · Answer

@Theresa Nicoletto thanks for the great reply.  Not manager right now, and i'm not sure i could handle spending even more time at the company. Just biding my time now. I believe i can use the extra earned income from Uber in the evenings to put towards a down payment on a first house. I'm in this to hustle, that's my plan.

It's tough right now, my local REIA won't meet again till january, and the one in Indy is the same. So right now, I'd like to be able to put some money in a safe place so that when I've learned some more, or made some partners, I'll be able to bring something to the table. I like your idea of being an investor's assistant. I'm very organized and good at problem solving.

This is me just working through HOW i'm going to get this done with basically nothing, and also when. It's no longer an "if".

Theresa Nicoletto · Answer

You need to step up your income ASAP.  Are you a manager at Starbucks yet? That will at least get your income up until you can get something that pays more.

If you are going to go the agent route, try to find a brokerage that will refund your licensing classes upon close of your first transaction. A car that's not reliable is going to be tricky no matter what you do. Uber is a great idea but check with other Uber drivers in the area to find out how much they make on average. (You could be an Uber driver AND something else... actually, if you are looking to move forward working a standard 40 hrs is not going to cut it - you got to be hungry!!)

Go to the REIAs in your town, get to know people and let them know you are hungry. You want to learn and need someone to take you under their wing. Look for jobs with wholesalers. What if you switched from your Starbucks job to being a personal assistant to an investor.

Maybe look for people who are trying to grow their business but are working full time. (Just thinking of my own personal experience. I would not have been able to grow the way I have in the past year if it wasn't for my personal assistant and systems. She's thrilled because she's learning a lot - and I get my stuff done. Plus she makes a mean tomato sauce, so there is that...)

The thing is, although you don't need that much money to get started, no money is really hard. (I know, duh right?) Being an agent, you are going to need to take people around in your car and you may not get a sale for a while. But if you work hard, you can do it. ... especially if you serve a niche market like investors... or out of state investors. You could be the "boots on the ground" for them if they invest out of state... Think sale, construction mgt, then property mgt, etc.

If you're going the wholesale route, you are going to need to get aggressive. Drive or bike neighborhoods. Find the crappy vacant houses, look them up on assessor's website for owners. Contact them and see what they are looking to sell their house for. (don't use Zillow it's pretty far off for comps). With no money, you need to get creative. Maybe even partner with an investor - tell them you will do the contacting of the leads and close them and then hand them over. You get maybe every 4th lead to sell yourself or you get a flat fee or % per house that you are able to close and get under contract.

Again... it's just being creative, resourceful and jumping out of your comfort zone.

Good luck and enjoy the journey!

Starting out with no funds. Should I become an Agent?

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