Becoming an agent and have $20k - what do I spend it on?

Question

Hi everyone,

I have a question for all of the agents here on BP. I have been investing for a couple of years and ended up acquiring my real estate license last year (I want to transition into real estate as my full time job). I'm 22 years old and can live very inexpensively - so I'm not worried about "saving" the money I have and using it for living expenses, I'd rather dump it into my agent business and use it to grow more quickly. I have about $20k that I want to use to accelerate the growth of my business, what do you all suggest I use it on/for? I obviously understand spending it on marketing is going to help me grow my business more quickly, but what kinds of marketing are you spending your cash on? What kinds of software helps you run your business more effectively? Or better yet, if you were just getting your license and getting into the business, what would you have spent money on initially?

Thank you all in advance!

Patrick Britton · Answer

@Axel Ragnarsson apologies for not exactly answering your question.  Fortunately it's actually pretty easy to get going (the lead generators will tell you otherwise of course :))

Your exact question was "I have about $20k that I want to use to accelerate the growth of my business, what do you all suggest I use it on/for?"

So the question is about accelerating your business, NOT what's the best way to get leads.  Sorry for my misinterpretation.

Here's what to do:

1.  make a list of everyone you know (friends, family, former co-workers, dentist, neighbors, etc.)   There should be about 100 or more when you are done.

2.  send each a hand-written note telling them you are a realtor now and ASK for a favor - ask them to mention your name should they know of anyone looking to buy or sell.  Don't have their address?  No problem, next time you see them, give them your card, tell them what you do (no elevator pitch, that's sooooo 2000's...) and tell them you'll see them later.

3.  after sending this letter, spend the next few weeks calling, emailing, texting and/or meeting each of these people.  just quick touches, nothing formal.

4.  during this entire process, familiarize yourself with the local inventory, stats, processes, etc., so that should you get a question you should be able to answer somewhat intelligently :)

You will get a lot of "so what's the market doing?"  This is more often than not a small-talk question.  They aren't really asking, they are being polite.  Give them an answer they are not expecting.  Like, "the market's fine, it's the agents who are the problem."  Guaranteed that will start a conversation.  And that's all you want.  A conversation that makes a mark.

The purpose is quite simply to make sure that the greatest number of people think about YOU when they hear anyone talking about real estate.  It starts small and slow, but if you do an amazing job for each transaction, in 2 - 3 years you won't need any more business, you may even have to try to limit your prospecting (then) or risk overload.

Anyway, answering your question:

IMHO if you want to spend that money you have saved on "accelerating your business" then spend it on yourself...your presentation.  Allocate a large chunk to your wardrobe, get very nice shoes, 4 - 6 great suits, a new phone, a new computer, etc.  Pay some $$ to get a decent looking website.  Nothing involved, but very personalized.  Also, allocate a large chunk to buying people lunch, coffee, treats, beers, etc.

The idea you need to spend money on a CRM or mailing/social media campaign or fancy ads in order to "accelerate your business" is a falsehood perpetuated by the same institutions that sell such gimmicks.  You need 3 simple things:

1.  to be seen as a professional

2.  to be competent, knowledgeable and confident

3.  to be the one people think about when they consider buying or selling real estate

If you can convince 20 - 30 people that you ARE this person, you will do well.

hope this helps

Patrick Britton · Answer

@Axel Ragnarsson As @Lynn M. said, be careful... There are a lot of real estate lead generation companies out there who will gladly take your money and provide you absolute nothing in return.

In my humble opinion, seems like you are asking what particular marketing methods work.  The answer is of course any form of marketing, so long as you do it consistently.  So instead of looking for a new home for your money, I would try to figure out what forms of marketing you enjoy and are good at because those are the things that you will do consistently and nothing is more important in this business than consistency.

Sure, it helps to have a good looking website and basic materials such as signs, flyers, business cards etc.,  But the most important thing is making sure you do something consistently.

In terms of software or programs and whatnot, I find Outlook, Excel and Google Docs to be all that I need.

Lynn McGeein · Answer

Be extremely careful as your money can go fast if you let it, and it seems like there is more money made from targeting real estate agents trying to market than actually being in the real estate business.  If you have upcoming listings from your sphere of influence, target those specific areas with postcards as people will begin to remember your name when they see you in the mail and on a sign nearby.

Account Closed · Answer

There's some good advice above - I'll give you my opinion.

For background I've been investing for ~6 years, got my RE license this year and work full time in banking. My view is to vertically integrate my own business to capture an extra 2.5-3% on each deal.

I would say that by just working for myself I've been able to pick up clients with zero marketing. I have a CRM system, business cards, a google domain and a LLC for property management services. Other than that nothing (maybe $250).

I make connections and once you mention that you invest personally (and by the way make money) people will be hooked. There are so many people who want to invest in real estate, but don't want to put the leg work in. I would say to spend next to nothing on marketing and maybe take that 20k you have and buy something that is cash generating.

As an aside, don't forget the tax advantages of being a real estate agent. Make sure you are keep diligent records to maximize your deductions. Always happy to chat more.

Zachery Buffin · Answer

As an agent myself, one who works in wholesale and with investors exclusively, I can tell you straight up you are focused on the wrong thing right now. BiggerPockets is a great place to start but you should not be asking how to spend 20k, you should be out there in person. Your business will be small and niche in the beginning. Decide what that niche will be and laser focus it until you succeed. I don't mean to be rude, seriously, text just comes across as more brash than I mean it. All I mean to say is that 20k can do a lot to cover closing costs, fees and the like for your first deal but not a whole lot more unless you are in a market of 50-70k properties.

This month alone I have spent 5k on "call" lists and the like, about 2k on mailers and print, and more here and there on advertising odds and ends. I do this to grow my business and find maybe ten new investors a month but truth be told I have received so much more business from craigslist, BP, Facebook, Instagram, snapchat, and meet up events (tax auctions, REIN, etc.) which is the point of some of the posts above. Hold on to your money and use the internet to cheat a bit, as an old sergeant once told me, "if you ain't cheatin' you ain't tryin' " and I find in advertising that tends to be true. Use friends or acquaintance, tell people what you do every time you meet them. Make people sick of hearing it from you, that way as soon as they hear something you are literally the only person in their mind. You have to hustle, believe me I hate hearing it to, but real estate is like working out no one can really give it to you you just have to go in everyday and do it. This is the ultimate dues paying job I have ever worked in, you just do it and one day without you really noticing it people start asking you, then you know you made it. Before that you're just running around with your hair on fire wondering why you ever got started!

Best of luck buddy, I really wish you the best and hope you make it happen. Just stay with it, especially when you want to quit, just always get up and do it one more time.

Josh McCullough · Answer

I'd buy The Millionaire Real Estate Agent, by Gary Keller and follow it to a "T".   You'll still have $19,985 in your pocket, and you'll have a great road map and business plan to follow.  As far as marketing goes...always lead with revenue and it shouldn't be more than 10-15% of your total revenue. Facebook ads are cheap and have the ability to reach thousands of people for $20 or less.

Abel Curiel · Answer

Good afternoon Axel,

You've received some great advice so far. I particularly like @Zachery Buffin's post. Start off identifying your niche (i.e. property type, specific school district, etc) while increasing awareness among your circle of friends and family. I missed out on 2 deals very early on by not putting myself out there more within my sphere of influence.

Facebook is a great tool both to market to your niche and also to market within your sphere. I run very inexpensive ads that go out to my FB friends, biz page "likers", and their friends (who aren't my FB friends...yet). This helps you build awareness throughout your community.

I spend some time on BP as well and have set up keyword alerts to help me get in contact with investors that are interested in my area. I don't use IG or snapchat yet but those can be huge tools depending on your target audience. If you're looking for sellers 50+ years old, snapchat probably isn't the best use of your time but it could be helpful for keeping younger buyers (or potential buyers) current on your day-to-day activities.

Networking events are HUGE!!! As Zachery mentioned, talking to ppl face to face holds major weight. Get out there and meet new people interested in RE! You'll soon become their go-to person in the area.

Show up to every family function/social event possible and learn ways to throw business and RE in the mix. As long as you're good at it, people won't have a clue what hit them... next thing you know, they have a sibling looking for a property or an uncle looking to sell his.

Spend your time and money wisely! I've spent a ton of both on things with little/no return. Take action, keep learning, and be consistent!

Best of luck to you!

-Abel

Deren Huang · Answer

The marketing you do should be something that you are comfortable with or good at.

For me personally, I was really good at cold calling, so I invested money in an auto-dialer, expireds/fsbo lists, neighborhood search. etc.

I am not a social media guy, so no money went into ads/social media.

In real estate, it is consistency, showing up and being there is half the battle. good luck!

Matt K. · Answer

down payment on a shiny new lease to woo clients.... (not to be taken seriously)

Becoming an agent and have $20k - what do I spend it on?

Most Popular Reply