Does it make sense to switch from corporate sales to RE sales?

Question

Hi All,

I have a very lucrative IT services sales job right now (6-figure+) but I'm very frustrated with the corporate politics that I've found at multiple companies. I have freedom and flexibility but I'm not entirely the master of my own destiny. Constant re-orgs. Backstabbing, etc. And so I'm contemplating the idea of switching to Real Estate full time in the next 1-2 years. I've always wanted to own my own business and have always been interested in real estate so this seems like a natural step to take. My relatives have invested in real estate. My husband is now a real estate agent. We have a couple of rental properties that will soon create some minor cash flow for us. And I find myself asking if I should start working on a plan to switch entirely to real estate. This would mean going into real estate sales where I could leverage my sales experience to earn some income but also investing in properties and trying to grow our passive income over time. Does anyone have experience with making a switch like this? What about with Real Estate sales? Is the agent model a dying one? Where is that part of the industry going?

Thanks!

Sara

Ali Boone · Answer

Hey Sara. I did pretty much what you are describing. I was an engineer at a corporate job that I hated and I started investing for myself and eventually left corporate to be an agent specific for investors and related to the properties I was buying already. If you want to message me, happy to chat about my experiences any time and can share any resources that might be helpful for you. Chicago would be a great place to do stuff on the investing side.

Brie Schmidt · Answer

@Sara Hruska - I worked in corporate sales for 9+ years before going into REI full time. One thing to consider is bank loans. Let's just say you leave today and do RE full time. Because of the job change you will need 2 years of tax returns to use your income for a loan. So let's say you make $40k to ramp up this year, I think that is a lot for a first year agent as it takes 6 months to close your first deal. Let's say next year you do $100k

In April 2019 you will finally qualify for a loan and they will use the average of the two years, so your income would be $70k

Most likely you will need to wait till April 2020 before you can use income that is closer to what you are actually producing

So if you have plans on acquiring properties, be aware of how a job change would affect that. When I did the move I already had 2 years of agent income on my taxes from buying my own deals, so my income could always qualify. But I have had problems with it because I started the business in August 2014 so until I file this year's taxes I have been using the average of a short year + my first full year.

I was lucky that we already had enough cash flow from our properties so I could still get loans, otherwise I would have stayed at my job so we could continue to grow

Jaclyn McClellan · Answer

Not that I have experience in corporate sales, but I would definitely think if you have experience in sales... you're probably over a lot of the humps that people transitioning to full time real estate agent struggle with. If you have money saved up.. which would be important because you won't be making six figures when you get started... I think you can do anything you put your mind to. And if you're even slightly thinking about it... think of it this way - you could quit, do real estate for two years, if you give it 100% and it doesn't work out, you could probably still go back to a corporate sales job (maybe just a different one). The worst feeling is looking back and wondering "what if I..."

In terms of where is the industry going.. I would say a lot of it is of course dependent on sale of homes. In the bigger scope of things, as the population grows so will the need to purchase homes. If you turn out to be a good agent, there is always a market for you :) Let me know if you have any other questions! I just got my license recently, I'm in the finance industry now as well.

Bryan O. · Answer

@Sara Hruska welcome to BP! The real question is, do you like what you do? You might be an amazing widget salesperson but hate the people that sit there and bicker over if the chandelier causes too much of a reflection on the granite counter in the island. These are your own thoughts and feelings that should be what guides you.

Another question is exposure. If the RE market has any issues, you and your husband are both struggling. Will you divide up the neighborhoods so you aren't competing against each other? Who gets to spend more money marketing? I've never had good luck working with a significant other in the same job, but again, that's me not you.

RE is amazing and I see myself eventually becoming full time as well, but for the moment I love my corporate work and it is what funds my ability to be an investor. Best of luck in your decision.

Mark Gallagher · Answer

@Sara Hruska

Put up with the BS at work while you focus on your side business. Until the side business consumes all of your time, and is providing income, then you leave your job.

It will take some time to get moving in real estate sales, so it wouldn't make much sense to throw away 6-figures while waiting on other income. Plus, you'll mainly be working nights and weekends showing homes.

I followed a similar path, and eventually was laid off and pushed into real estate full time. You'll know when the time is right, ideally you'll be closing 2-4 deals a month in real estate.

Does it make sense to switch from corporate sales to RE sales?

Does it make sense to switch from corporate sales to RE sales?

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