Six-Figure career switch to Real Estate Agent?

[Solomon Ganz]

Hey all, I'm a 37 year old with a successful 15-year advertising career making six-figures.  My largest frustration is that my salary is beginning to cap at low six-figures and the % of people making huge amounts of money (500k+) is like 1%.  And, if and when you attain that, you can easily get fired at any moment (I've seen it countless times as executives get into their 40's) and then you're down to zero income overnight (with a hard time finding a new gig).  I'm strongly considering a career-switch to Real Estate Agent as it seems the income possibilities are endless (assuming you work extremely hard and are a people person, which I have both).  My plan would be to hit it hard and make as much as possible within a few years, but also as I become an expert in my market, have the time flexibility (which I have none of in my current job) to find and partner with some investors to buy-and-hold or fix-and-flip some properties over the years (maybe dedicate 1 or 2 days a week to this).  I would love your professional opinions on whether you think at 37 years old I have lost my mind to leave a successful career path for this plan?  Is 37 too old to get into the Real Estate Agent game, from scratch?  Assuming I have the people skills, and precision focus and motivation to hustle; how long would it take to make six-figures as an Agent in Los Angeles, realistically?

[Russell Brazil]

Im slightly older than you at 38 years old. I made the switch from working in one field where I was in the low six figures to working in real estate 4 or 5 years ago. However I was a part time agent for about 10 years before that, so I wasnt exactly jumping in blind.

I found the jump pretty easy, and make considerably more than I use to, and also considerably more than most agents. However I live and breath real estate, so I dont really think of what I do as work per se.  

There is a reason though why roughly 90% of agents drop out of the business in year 1, and 90% of the remaining drop out in the 2nd year.   Those of us who are successful consider it pretty easy to make it in the business, but it really isnt.  Ive seen very smart people, very hard works fail at this business, and it can be hard to put your finger on why one person succeeds and another fails.

In a major metro area, someone with talent should be able to make it up to that $100k level.  The jump though from that $100k level, and being kind of a 10-15 transaction a year agent, up to say the $300k level and 30 transactions is going to be a much smaller number of people. Then from there you kind of make the jump up from there to your larger real estate teams where the team owner can make anywhere from $500k to upwards in the several million per year.  

To put it in prospective though, for individuals selling $20 million in sales volume, or teams selling $30 million in sales volume per year.....you are looking at roughly 1,000 people in the entire country.  The list is published every year by the Wall Street Journal and Real Trends.  Also as an FYI, a top solo agent may have a profit margin of 70% of gross commissions, while a team owner has a profit margin somewhere around 30%,  So of those agents selling $20 million in volume, you could probably ball park their actual salaries in the high $300's.

The biggest thing to consider though is that being an agent is running a business and not having a job.  And businesses take operating capital, whether there is revenue coming in or not.  So having $15-$20k per year to invest into your operating expenses as a beginning agent is going to go a long way towards success as opposed to someone who has no money to invest.