Considering a real estate career - tell me the ups and downs

[Karen M.]

Hi Everyone,

I have been interested in real estate investing for a couple years, but have decided NOT to pursue buying rental homes at this time.  I have three young kids and decided it would be easier to invest in stocks for many reasons (liquidity, diversification, not taking on debt, not managing tenants, etc.)  The kind of properties I want to own are beyond my means!

However, I am considering selling real estate as a J-O-B.  Right now I am a fitness instructor and I teach 10 classes a week, and I am a mom.  I have a great schedule but I am not bringing in much money for our family. 

I am considering getting a real estate license and selling homes for a living.  I might even want to be a "part time" real estate agent.  I am concerned about balancing family life with selling real estate, however-- I don't need to watch TV.  I do need to keep the fridge full and the kids on task at school and at home.

I think the benefits would be great - I would get to know our market very well and develop skills related to real estate, and I would be able to save 100% of my income and put it towards either stock or real estate investments.

Please tell me about the reality of being an agent, and getting started. 

What kind of budget would you set for startup costs?

How do you see the retail real estate market changing?  What will life be like for retail agents in 5 or 10 years?  (Edit to add: I live in a market that is good for rentals and could possibly help investors here.  The only caveat is that I expect to be selective on neighborhoods and safety.) 

What sucks about being a real estate agent?  I was effectively talked out of land lording by Bigger Pockets star, Ben Leybovich -- and that was very helpful!  Land lording likely doesn't suit my personality right now, it's too much money, too much debt, too many headaches.  Being an agent will have headaches, but it seems easier. What's your input? 

Thanks so much,
Karen

[Scott Beck]

Hi @Karen M.,

Several suggestions:

• Have at least 6 months of living expenses saved up before going down this path. (FYI, it usually take about 6 months to close your first deal. There are some exceptions to this, but they are rare.)
• Set up meetings with local brokers and find out what is required to be an agent in their brokerage. Look at both the big and small players. Ask about their cost structures and expectations.
• Talk to local agents about how they view their job and how much time they spend on it. Also ask them about the brokerage they are signed with, as you will most likely get a much different perspective from what the broker told you.

Before making a decision I recommend reading the following:

• How much money do you need to save before becoming a real estate agent? (http://investfourmore.com/2014/06/how-much-money-do-you-need-to-save-before-becoming-a-real-estate-agent/ )Note that Invest Four More is a website by @Mark Ferguson. He has lots of useful information related to being an agent and doing RE investing. You might consider following his posts here on BP and looking at his website.
• The links at the U.S. Small Business Administration website (https://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business )
• "21 Things I Wish My Broker Had Told Me" by Frank Cook (Dearborn Real Estate Education 2007).
• "The Millionaire Real Estate Agent," by Garry Keller and Dave Jenks.

These will all give you different perspectives on what you need to know to be successful.

Good luck!