Newbie investor-NO $$ at all and horrible credit

[Renae Bliss]

What can I do to get some deals going, get some cash flow coming in to where I can pay down my debt/build my credit, AND be able to keep a roof over my own & kids' heads?? I've heard the usual "get a part-time job", but I've been applying for 5 years and still NOTHING! Real estate is the only thing that makes sense for my life/needs.

[Joel Owens]

Hi Renae,

It sounds like you are new to being a real estate agent and are trying anything to see what sticks.

The public thinks all brokers/agents are rich and cash big checks all day.

The truth is most agents over 90% are gone after the first year in the business. Over the next 5 years 80% of those that make it past the first year are gone. The average income is only about 34,000 a year gross before expenses. This average comes from some doing more deals and other agent doing 1 deal or none at all for the year.

For brokers the average is around 60,000 or so. The top 10% make way more than those averages it's just the people that aren't closing anything bring down the average as a whole. What you need is experience and training. If you are at a company that gives you a web page and puts some of the company listings on your page to hopefully get a buyer call you won't last long.

You need to decide what kind of real estate you want to do. If it's working with home buyers that is fine. You need to find a top producer who is doing volume to learn from. Find out how they get the transactions across the finish line quickly and efficiently to boost income.

Seasoned investors with a lot of money to invest seek out experience. Even new investors with 400k,500k, 1 million cash etc. want someone that has a ton of knowledge and experience to decrease their risk in real estate investing.

You need to define 2 levels as an agent.

1. Keeping your head above the water and paying your bills and having food to eat. Budget out how much that is per month for your family. If it's 4,000 then you need to find out in your area what a first time home buyer average house sells for. If it's 200,000 on a 50/50 split then at 3% for your side that would be 6,000 and then split in half 3,000 to you gross.

Looking at that you would need to close about 1 house a month for 11 months and then 2 houses in the 12th month or 1-12 close 2 out of one of those months to be close to 40,000.

Now if you are at a brokerage and part of a team they will probably take 25%. So you would make only 1,500 gross and need to sell 2 houses a month and one month out of the 1-12 sell 3 houses.

This is just to keep your lights on.

2. Have a income goal to live comfortably 60k,70k, etc. and then work your numbers as before. As you get experience your split will get better. If you start at a high split company expect to get little to no training because of the low payout to the broker doing volume for low fees per transaction. As a new agent 80% or 90% of nothing is nothing. Most brokerages with new agents at high splits take them in hoping to get 2 to 3 deals in a year before they go through their circle of influence and run out of gas and quit.