Getting Started as a CRE Broker

[Lucas Benjamin]

Hey Guys,

I've been digging around on the forums for months now, but this is my first ever BiggerPockets post! My name is Luke Benjamin and I'm thinking about becoming a CRE broker in CA. I have a family friend who is VERY successful in the business, and I will likely be joining his team. Not looking to ride his coat tails by any means, but I am grateful for his mentorship and to use him as a resource throughout my future career. I am looking for advice as I'm about to take this biggest leap I've ever taken, and I'd be lying if I said I wasn't nervous as hell. Excited, but nervous. Here's why...

I'm 27, I'm about to get engaged next month, I just closed on my first investment property in CO last month, and I'm moving to Southern California the first week of June. I currently work in Construction Management building largescale ($100M+) Multifamly buildings in Denver, CO. I make a decent salary - significantly more than I'll make my first year in CRE. Not to say I don't have confidence in myself, but I'm just being realistic. My soon-to-be fiance and I just spent the majority of our savings on the down-payment for the investment property, so we are cash-poor at the moment.

Southern California is obviously a very expensive place to live, and I'm trying to figure out how to make ends meet while  I'm getting started in the busniess.  My partner is a social worker, so not a ton of money coming in there - at least not enough to support two adults in the LA/OC area.  My folks are retired and live off my mom's pension from being a school teacher, so I am likely not able to use them as a resource during the time when I'm making little-to-no money.

To all you CRE brokers out there: what did you do? All the threads I've read mention people saving up a year's worth of expenses or living with parents; that just isn't in the cards. At least not anytime soon. I'm pretty certain that the brokerage I'll be working at is 100% "eat what you kill," so draws are probably out of the question. If it were only me involved in this decision, I'd feel entierly different. However, this risk does NOT affect just me, it obviously affects my partner as well. If it were just me, I'd eat ramen for breakfast lunch and dinner, live in my car, and just make it work.

Am I in over my head? Is there anyway to finance my expenses for the 12-36 months that it takes me to get established? Just trying not to set myself up for failure and to be honest I'm feeling a little discouraged. I can't stand the W2 lifestyle - like I said I make decent money now, but I can't see myself staying in my current industry for "x" amount of years to save up enough to take the leap into CRE. Any and all insights/thoughts are appreciated.

[Bruce Lynn]

CRE is a very broad field. What specific area do you plan to practice? How fast do transactions happen in that space? That can give you an idea of how long it will be before you get paid.

If you are doing small retail leases, maybe your payment times are shorter.   If you selling chip factory developments, well those may be 3-20 years before you get paid.   Remember you can have pretty big expenses too while all that is taking place depending on how your office works, what the splits are, and how you share the overhead with the other agents in the office.

Go for it....but especially in CA you will probably need more than a shoestring to make this work.   One thing I would suggest is don't change everything at once...it just puts so much stress on a new marriage.  New job, new city, no money, and don't mix kids in there year 1....take it slow.  Maybe move, but do the same work for a couple years, make sure that's where you want to stay for a couple of years before you mix kids into the equation.  Make sure you have insurance and money saved up.  Get your license and start building that database over the next two years.  Be able to hit the ground running when you make the switch.