Considering becoming a real estate agent in Phoenix. Any advice?

Question

This is the first question I've posted so take ur easy on me if I jack it up. I currently work for the government. I have made the decision to pursue financial freedom over continuing the rat race. I have work to do before I can purchase my first property plus my wife and I are expecting our first child in February. I am looking for genuine advice as I am leaning towards becoming a real estate agent in the Phoenix area. Any advice you can provide on best schools or training and agencies to work with would be appreciated. Im ready to make my move just want to be smart about it.

Will Barnard · Answer

This is a common argument against getting a license and I offer this rebuttal: Why on earth would anyone be scared or hindered from any added disclosures? As an agent and owner of a property in CA, one only needs to add "Seller holds a CA real estate license" in the listing and marketing materials for that property. Big deal! As to the $1k cost per year, if, as an investor with a RE license, if you can't get $1k in value from your license in one year, you are doing something very wrong. Just my opinion but food for thought for all to chew on.

Will Barnard · Answer

I am going to agree AND disagree with this. I agree in that holding a RE license will not on it's own make you a better or smarter investor, but what it WILL do (if applied properly) will give you inside access to MLS, access and relationships with fellow agents in the brokerage you select, ability to save money/make money on your own investment purchases and resales, etc.

Welcome to BP Nation and if you are reading and willing to become a real estate investor, then I suggest you stay very active here, engage the community (as you have just begun to do), pick your favorite strategy that fits you, and learn all you can about said strategy and your market you intend to invest in. Getting your license will open more doors for you too. Most agents fail but most real estate investors who also hold a real estate license can do better than without one.

Russell Holmes · Answer

@Malcom Ballard welcome to the BP forums! You've taken the first step of posting, and you'll find a literal gold mine of information and helpful support here.  I joined BP almost 3 years ago (3/2017) with an interest in Real Estate and no idea which way I'd go.  I already owned my house, but did not have enough capital to invest. I had run a service business since 2007 which was paying the bills but wasn't a passion of mine nor was it pouring off the cash flow I'd need to save and invest. After devouring knowledge, asking a bunch of (sometimes silly) questions that the seasoned veterans on these boards graciously answered for me, reading suggested books, and digging in further, I, too came to the decision to get my Real Estate License. Your state licensing laws likely vary from FL where I'm at, so you'll have to research requirements.  In FL, there is a required 63 hour pre-license course and then a 45-hour post license course that must be taken before the first renewal.

Late November of 2017 I started online Pre-licensing coursework through RealEstateExpress.com which I highly recommend.  I found the self-paced course to be exactly what I needed to learn it while still running my other business.  I finished and passed the course exam by early January and then worked through about 1500 exam-prep questions broken out into multiple mock exams.  I'd go back and study what I wasn't familiar with. After I felt confident with those, I scheduled and took the state exam, passing and becoming a licensed Realtor in February 2018.

That is the first step.... but what is more important is to decide how you want to work it around your job.  What is your work schedule like?  Do you enjoy your job? Do you want to eventually become a full-time Realtor?  I joined EXP for the flexibility the training and cloud based brokerage provided.  Other brick and mortar brokerages like Keller Williams offer intensive on-site training that can likely get you up and running quickly if you jump into full time right away.  Their in-office training did not work for me with my service business and I've been really happy with EXP. Into the coming year I'll be able to get my broker's license and go independent if I choose (in FL you have to be a sales agent for 2 years). My wife also got her real estate license and currently has it hung with a referral brokerage.  If I get my broker's license she can hang it with me, or she can join me in a husband/wife team at EXP as well.  If you plan to stay part time, and/or your job won't allow you to check voicemail/email throughout the day, you may consider joining a team at whatever brokerage you decide.  On a team, you can play a valuable role and learn all aspects while not having any one transaction or client rest fully on yourself since they'll have transaction coordinators, lead gen, and office staff to help out.

I was 12 years into a 50-60 hour per week service business (mobile car detailing) that I was burned out on by year 10.  I was ready to make the leap, but financially not quite able to until I had built some momentum.  Being my own business, I could take calls and emails whenever they came in.  I referred to my service business schedule as having 'meetings' or 'appointments' so that my early Real Estate Clients didn't get the impression I wasn't full time. A few figured it out in time and were impressed that they hadn't known before. I never once treated a Real Estate Client like they were a 'side hustle' but have dealt with Realtors who do and it doesn't work well.

I'd sweat all morning, rush home for a shower and change, and show houses in the afternoon like I had been doing so all day.  Mentally I was a full time Realtor, but physically it took me from Feb. 2018 to June of 2019 to fully taper that service business off to shutting the doors for good.  From about January 2019 on, I was part time in my service business and easily 40+ hours into Real Estate each week. Since June I've lived and breathed being a full time Realtor and I absolutely love it.    Early on in my real estate career, however, I was working full days and then staying up until 2-3am to read, learn, analyze property, network, etc. Up at 7am the next morning to get the kids up for school.  I showed a lot of property and made a lot of offers, but didn't close on my first sale for 9 months (11/2018).  That investor client was with me since day one, looking for his first flip and had found me right here on BP.  We unknowingly were building a relationship that shortly into that flip would result in him bringing me in as a partner to help manage the contractor and make decisions after delays mounted.  That flip is done and on the market and we're talking about building single and multi-family properties for rent next.

However, back in Nov. 2018, it was 'just' my first sale. A small commission but proof of concept, I did it, I sold a house!  I had another in escrow at that point that closed in early December.  Then another a few months later in April that paid more than I made in a month detailing cars and it was on.  I closed 8 more in the next 8 months, listings and buyer sides about 50/50....would have been 9 as of writing this but a closing scheduled for this past Tuesday got bumped to this Friday.  12 sales in 13 months (after this Friday's) with two active listings isn't breaking any records, but my momentum is growing steadily and I've got a more clear path of where I'm headed. Several times in late 2019 I had 2-3 in escrow at a time which was a great feeling.  I've got a JV partnership with a cash partner and more connections with PMs, contractors, attorneys, title companies, and other Realtors than I ever imagined I would have a year ago.  My goal for this year is to double what I've done the previous 13 months: close 24 properties with at least 2 of them being new projects with my JV partner vs 12 & 1.  Some guys jump right out of the gates with 20 sales their first year, but everyone starts somewhere.

I've got a long way to grow, a lot to learn, but looking back I'm quite impressed with what I've learned and accomplished in the previous year. It all started with jumping on Bigger Pockets in March of 2017, buying a pre-license course in November 2017, and diving into being a Realtor in February 2018.  My only regret is not doing it sooner.  I started the pre-license course in 2014 but stopped to focus on growing my service business.  Looking back, I should have stuck with Real Estate then.

It's been a fun ride so far and I'm really looking forward to the coming year!

Ryan Swan · Answer

@Malcom Ballard being a real estate agent is not a path to financial freedom and in fact, it can be the exact opposite. Case in point I mentor 7 new agents at my brokerage and only ONE has done a single deal in the past 9 months or so. There are well over 8,000 agents in Metro Phoenix alone, and it's tough to get buyer or seller clients when you're swimming in such a crowded ocean. The reality is you might not make any money from real estate in your first year of doing it full time. Do you have the saving reserves to pay all of your living expenses while you work on growing a sustainable client pipeline? If you DO build up a successful business as an agent, it can often feel more like a rat race than going to a 8-5 job for a paycheck. You ARE the business, and if you don't do it, no one else will. You don't get PTO, sick days, or any medical/retirement benefits. You have to budget and set aside money to pay quarterly taxes. You have to constantly be prospecting for new clients while also simultaneously taking care of the active clients. I had 7 active escrows going over the course of Christmas and New Years holidays. I wasn't able to take off any time last week and had to be at three apartment building inspections for out of state investors. There is tremendous reward at the end of a deal, and the harder you work the more money you can potentially make.

Russell Holmes · Answer

I guess I should have prefaced my initial reply with the question "Are you passionate about Real Estate". I take that as a given on these forums but it isn't always the case and there's nothing wrong with that. Not every Real Estate investor is actually passionate about the industry to enjoy transacting real estate, just like not everyone with a stock portfolio is passionate enough to be a stock broker. I happen to love Real Estate and plan to build a sizable portfolio in the coming years.  The two are related but don't have to be. I was sick of what I did for a career and it wasn't producing the income I needed to invest.  I wanted to learn more and earn more, so it was a natural step to dive into this industry.

If you aren't passionate about completely involving yourself in this industry and making connections, it is not a very fun or rewarding 'job' in a job context. I never wish to be the 'bus bench Realtor' sponsoring the little league games and wearing a branded name tag around town. I want to be in the trenches doing deals with other people's capital.  At first I figured I'd have years of not being involved at all other than commission as I build capital to invest, simply learning and growing through each transaction.... but then I found a partner to become involved in an equity position on his deals.  I'm running with that partnership, closing more deals with non-partner clients, and keeping my eyes open for other partnerships that come about as well. Investing and being a Realtor are two separate things. One does not exclude the other, either can exist independently, but to me they are mutually beneficial to do together.

The next few replies after my initial one reference the fact that a Real Estate license is not a path, in and of itself, to financial freedom. This is absolutely true.   There are no guarantees, there is no set paycheck, there are no company benefits.  I often forget many people grow accustomed to those perks. I haven't had a boss in 13+ years (and I'm only 34), so that's all pretty foreign to me anyways. Like many have or will point out:

-it costs money every year to be a Realtor

-most who 'try' it fail

-looking to get financially free on sale commissions will drive you nuts and will become a job. You won't get rich on commissions unless you build a team, which itself becomes a job also.

I graduated high school in the top 5% of my class with two years of college credits from AP classes in High School and a full ride scholarship to University of Florida. I dove head first into an engineering degree.  THAT felt like a rat race to me and I dropped out to start a pickup-truck-based service business for $8000. My college-educated family was mortified, but it was the best decision of my entrepreneurial adult life. I bought a house when my peers were searching for careers and loaded down with student loan debt. That one purchase helped me survive a nasty divorce and keep my business running without worrying about increasing rents and moving around.  I made more in my own business than the vast majority of my college peers did by the time they graduated with 4-yr degrees in fields flooded with other 'degree holders'. I grew my business to an extremely stable income, I made nearly a million dollars in 12 years with very low overhead and no boss. No benefits, no paid time off, no 401k....   Then I got sick of it and quit that business to be a Realtor, another 'business'. I like this one far better than my service business. It is not tied to my hourly input directly like my service business was and has far more directions I can take it in.

Most small businesses fail just like most Realtors fail. Jobs are hard to fail at when bosses tell you what to do, but I'm not a big fan of bosses and I like deciding where to devote my time.  I succeeded at a service business most fail at and will do the same as a Realtor.  It never really phased me to hear about the failure statistics, I knew it was a state of mind.

As Will said of the industry, being a Realtor has opened so many doors for me. I've met so many professionals that will benefit my future investing, even though I don't yet have the capital to do my own solo deals. Having a license is not THE answer to financial freedom, but it was a vital step in my path toward that goal.  Sure you could network, go to meetings, meet other investors after your day job. Many people love their day job and enjoy networking with investors after work.  I have a lot of fun doing that during my 'day job' and spending time with my family after the day.  I'm actually transacting business with these folks I network with, not just swapping business cards and rubbing shoulders.

Contractors I've 'worked with' pick up the phone when I call because I've had clients that pay them for work and they would be happy to take on more referrals.  I might be a 'newbie' in the investor world, but when the phone rings they pick up because I've earned credibility through other people's money and deals.   I have contacts at title companies that have closed deals with me and will answer obscure title questions they likely wouldn't be quick to if they were just contacts in my phone from a meeting. Lenders who have funded my buyers will answer questions about obscure strategies I'm researching because they've closed loans for my buyers.  If they were just a contact in my phone from a meeting they likely wouldn't take the time to respond. I'm building a team before I'm building a portfolio, which will make building a portfolio that much easier.

The things I learn in closing deals with others will help me be more proficient in closing my own deals.  Almost every property I've sold has involved an investor on one side of the deal or the other whether my client or the other side, it is all interrelated if you choose to look at it that way and seek out investor focused business.  I don't think I will be earning the majority of my income from commission sales in another decade as I build more partnerships, build my portfolio, and do more deals of my own. Someday I may decide not to use my license at all for anyone but myself and partners, but for now I'm having a blast as a Realtor building momentum.  I was hungry to jump in feet first to Real Estate before I had the capital to do my own solo deals, and I did just that.

No, being licensed isn't for every investor. It's not necessary to have a license to invest and certainly most Realtors are not investors.  A license is not get rich quick. It is not a sure path to financial freedom.  But if you feel that it is something you are passionate about pursuing, you'll be glad you did.

Ryan Swan · Answer

@Patrick J. in my experience, most negotiations revolve around three areas 1) roof 2) HVAC 3) health and safety. Repairs or credits in those areas seem to go a long way towards pleasing buyers. Fixing any active leaks/drips is also important, along with adding GFCIs or correcting other electrical issues that invariably come up on reports (open grounds, reversed hot/neutral, etc).

If the seller is willing to pay for a home warranty, then it cant hurt to take it. Otherwise, I usually only advise to buy them when the HVAC system is old and the HW serves as a hedge if the system has issues in the first year. I negotiated one for a buyer who closed a couple months ago, and he just told me their heater died and all repairs were covered by the HW. Make sure you add coverage for old ACs if the inspector notes they use the R-22 refrigerant (the company I like calls this "AC Incompatibility" coverage")

Account Closed · Answer

You need money or you need drive but you don't need to be an agent. Join AZREIA.org and get to know 2,000 other investors in the county. Then, you can get what you need except for the drive, that has to come from within.

Sean Mcintire · Answer

@Malcom Ballard What makes you think becoming a real estate agent will help you escape the rat race? If you are planning to become an investor, being an agent doesn't really help you be a better or smarter investor.

@Anthony Dooley

THIS GUY NAILED IT!

The Phoenix (I live here) mkt is way overvalued and soon or in the next 1-2ish years due for a sharp fall.  Even if it's not, you have 2 people who now depend on you for $$.  RE agent is hardly safe/secure/steady $$.

Yea, I know the rat race sucks but ...

John Barrows · Answer

One last thing on becoming a real estate agent.... Make the effort to get a lot of upscale business cards, put good information on the cards and an easy way to get a hold of you. Then just pass them out in most everywhere you go. That will be a great way to start your business. Can't be shy in this business.......

John Barrows · Answer

You and every retired person living in Phoenix. Check Maricopa county and see how many real estate agents there are. LOTS.

Considering becoming a real estate agent in Phoenix. Any advice?

Most Popular Reply