Focus on Being Agent or Investor

[Eric Stafford]

The Background: 

I have personal contacts in the commercial development space in Massachusetts / Rhode Island who have tried to nudge me into the business. I can't give up my full-time job, as I am the provider for the family, so the chance for exposure seemed to be as a part-time agent.  Since passing the exam, I now have young children as additions to the family.  Given that chaos, I never actually followed through with finding a sponsoring broker.  

I have sporadically tried to leverage this site for information and search for the right kind of broker for my situation. My opportunity falls within the commercial space but commercial brokers are "full time only" given most calls I've fielded with various brokers.

The Problem:

Given some recent developments, my connection started flipping commercial to a real estate investment fund that will take on "free standing ground leases with national tenants". Needless to say, in the past 6 weeks, I've missed out on roughly $100k in commissions.  Those deals came out of nowhere but I want to be prepared the next time it happens! I've always been focused on making $ through commissions but the opportunity now seems to be helping with the projects/deals and really learning on the investment side. 

I'm not an industry pro and, of course, I now wish I followed through and have been doing this for 3-4 years already. While working a full-time job, what's the best use of my time in this situation? Agent/commissions vs. facilitator/investor.

I understand that my issue might be an outlier in this section.  I'm open to a message or offline chat if you feel its not appropriate in this space.  Apologies for the long post.

Eric

[Joel Owens]

Bottom line you have to commit full time to commercial real estate.

I hear this frankly all the time. People want to succeed but then have high debt or cost of living and say they cannot go full time.

Maybe you could do another kind of work in commercial that pays similar to what you are doing now. That way at least you start learning and getting paid for it.

To give you an idea I get asked frequently to learn about commercial. I usually tell them 25,000 non-refundable upfront with a 50/50 split. This way they make 50,000 commission then they get it all that first time as they have already paid 25,000.

Just like rehabbing a house with a hard money loan people want others to have skin in the game.  I average thousands per hour for my time. So If I took 20 hours training someone and they do not complete the steps I am out 20,000 worth of production time for myself.

I have to know if they do not follow the steps they stand to lose 25,000.

There are some firms that will allow you to work as a junior agent full time. Generally you do not make much at all. Example 100k commission and 50 goes to brokerage. 3 person team 50k left. Top person gets 25k, middle person gets 16k, you as an example get 9k.

Just keeping it real. Hope it helps. You have to take away the crutch of a job and go for it all the way. If you do not close the bills do not get paid and you do not eat. That is super motivation to make it happen every hour and work smart and hard.

If you have a full to part time job and do real estate on the side that is a (hobby) or a (dabbler). When clients are investing millions of dollars in a transaction they want a full time expert and not a dabbler.