to become a real estate agent or not?

Question

Hi BP Community! My Name is Alexander Friedman. Please feel free to call me Alex. I've been living here in Portland, Oregon for a little over a year and recently got my license to be a real estate agent (though I haven't yet hung my shield with an agency). I'm having a bit of a debate with my self and I'd very much appreciate the communities thoughts on this: What I really want is to be a real estate investor but my education and experience are lacking. Some people close to me recommended that I become an agent as a way to build some experience and confidence, and learn the industry. What I'm wondering is: Is this a good path to a thorough and effective education in real estate or a distraction that will take away time, energy, and $ from what I'm really trying to do? Would I be better served going to the local real estate investors club, learning here on BP, and hustling on my own? A note about my current position: I have some savings that would allow me to be an agent full time for a good long while but I'm wondering if that money is better spent starting a business as an agent (in a very risky, tight, and competitive market) or if its better saved as something to bring to the table with possible creative financing options like a partner, hard money lender, seller financing, etc... I'd really appreciate your perspectives on this folks.

Steve Milford · Answer

@Alexander Friedman

I would suggest finding out what makes your goal the easiest to get.

I am licensed in both OR & WA, have been licensed a little over 1 year, am a buyer's and seller's Realtor, AND I have a FT job. I am also ambitious. I chose to hang my license after interviewing more than 20 brokerages - you need to find a brokerage that fits your style. I like hands on training a lot more than lecture style - so the School of Hard Knocks works well for me. I find all my own deals or pay the referral fee I negotiate, and by year end I am set to complete 12 deals. Not bad in my book for a Rookie who does this in the evenings and weekends. And my principal has informed me that I encounter all sorts of problems that Realtors with more experience tend to get - as I dive in with both feet.

I network when I have time, although that is a problem, a lack of time. I also schedule my family time (as I am an involved Dad and family man) and don't compromise there. Where do I find the time? This is my passion - I love it - this stuff keeps me up at night. I don't watch TV or sports - I don't have the time. Networking at clubs, meetings and online etc, is good although it is a long-term solution. The anxiety you feel is because you want a short-term solution and that is where the real estate transactions come in. Hypothetically, if you got a client today that pulled the trigger on a house today, you could close in 6-8 weeks, or less. And along the way you will be learning and as you experience more and more, your apprehension becomes less and less. Some things that I have learned faster as being a Realtor than I would have in a meeting or club:

1) How to qualify buyers and sellers in 1 or 2 questions. 2) Learning that hardly anyone is as close to pulling the trigger like they think. A ready buyer to me is someone that tells me they are interested, that has a pre-qual/approval in-hand, and they are willing to go look at homes tonight. It's a Friday - so what? I do it all the time and with a flash light if needed. 3) How to structure deals (how creative you can be). 4) The greed of other Realtors (and by their behavior), which showcases when they were paid last. It cracks me up some of the comments I get - and I think, "You just showed your own hand," LOL.

Also remember that every brokerage offers a different package. i.e. KW offers tons of training yet offers a split that I am not fond of - so I didn't go there. I get calls all the time for, "You want to switch brokerages?" Heck no, I am having a blast with the one I am at. For me, I care much less about training than I do about finding more deals. If I find a new problem for me, I call my Principal broker on his cell and talk to him about it. He answers it like I answer mine, any time of day if I am awake. For me, creativity is also something that I wanted. i.e. I can write an acceptable deal on a napkin if all parties agree. I run into the "form police" A LOT. Cracks me up every time!

I got into the business to learn the best ways to get the best deal. And NO I don't have the cash to pull off an investment property now in addition to my current mortgage, though am building that nest egg with my completed transactions fast. Ironically, I found my current home as a Realtor, and paid myself. Ironically, I also found that my risk aversion was rather high, and being a Realtor is a better return on my investment of time and money than being an investor. I think I have made 5-6 times in net income versus what I have spent being a Realtor. Now when I have the cash for a "true deal" maybe that will be different.

Ultimately, to find deals, you have to talk to lots of people and perform marketing functions OR you have to pay someone to talk to lots of people and to perform marketing on your behalf. If you find after a short time that being a Realtor is not your cup of tea, then bow out and keep being an investor although you have gone this far, you might as well give it a shot. Yes the fees to access RMLS seem to me to be excessive, although if you act as if its a business, then realize it is just a cost of doing business. And your first completed deal would reimburse you for your costs with a little extra.

If you want to meet up I am all for it. If you want to help me find deals and then I coach you through it, I open to that as well (its called a referral fee-though most don't offer coaching). Contact me directly for the fastest response because I am only on here about once a week. I am busy LOL.

By the way, the market is not as "very risky, tight, and competitive" as you think. It is this way because you are getting caught into the propaganda. Get your hands dirty and you will find out the truth. Really it just moves fast because there is no inventory and is a huge game of hurry up and wait multiple times throughout a transaction. So what?

Give me a ring if your up for it.

Steve

Adolfo Cuellar · Answer

Hey @Alexander Friedman,

I have been a licensed agent in Portland for a couple of years now and I got my license with the intent to learn and make money so that I can be an investor and this is exactly what I'm doing.

I've made money and learn a TON. I dove in and got my hands as dirty as I could and it's paid off in every way.

I agree with everyone- it's what you make it.

Writing down your outcomes and reviewing them is key to taking the path that will inevitably unfold before you.

Feel free to reach out and let me know if I can help at all.

Cheers,

Adolfo

Michael Lee · Answer

Hello and welcome to this website!  I have heard both sides talking it up both ways.  I had a broker license for about 30 years but I never did that full time.  The knowledge you have gotten will likely pay off as an investor.  The broker you sigh in with must be flexible and you must be considerate on the time spent as a licensed Agent.  You can save a little as an Agent commission fee and as an investor.  But I think it might be better to give your resale business to somebody else.  Now my father has represented others for about 45 years as a real estate broker but he has selling abilities to talk to people that I don't think I have.  I think that most residential licensed people are good at their selling abilities.  How do you feel about your abilities are in buying and selling?  I did a few deals for my friends and they were a supplemental income for me but hard work.

I agree with what others have said and hope you do to.  You can go either way but I think investing is easier but I do not know for sure so you can go what either way you feel.  Being a broker for so long and taking two full days of class every two years has educated me quite a bit and a chance to network with like-minded people.  From what all I have seen and read and heard has helped that I allready learned about and has turned into a confidence for me in being successful even though that has not been proved yet.  I am still distracted by honesty and fear but they are probably pretty typical for a bunch of people.  It is probably good for you to have to take that supplemental education and I am sure it will be inline with the supplemental education that successful people are saying they take.

Just the education you have to take will probably help you as an investor even if you do not have any commission checks to show what it's worth.  One of the main things going both ways is the education and the discipline you have but you will not have to talk to the same people or as many as an Agent does.  Maybe you do have to talk to as many people and it is just a different type of people you have to talk to.  I hope that this "talk" helps you make a decision.  Either way is acceptable for what you do.  It is all about you and your ability to make conversations with people.  Just do what makes you happy.

Good luck to you!

RJ Reynolds · Answer

Yes it is a good path to learn the industry and Yes, it can be a complete distraction from your ultimate goals IF you let it. It should not take $'s from investing and in fact could create a good foundation as well as contacts BUT if it's not what you love (selling real estate) it could easily create internal friction as you work on helping other people buy & sell rather than doing it yourself.

It all depends on YOU. Create a vision board. Create a solid plan. Review it with experienced investors AND agents.  READ it every single day and make those adjustments as necessary.

During the process of creating the plan you will know whether going the agent route is the better option. Listen to yourself.. how comfortable are you spending the money investing rather than working as an agent for yourself.

Go to business planning classes held this time of year at your local Keller Williams office (anyone can go, just call and ask). That will really help you determine the time and planning ... i'll stop now.

That's my 2 cents.

Good Luck!

RJ

Michael Lee · Answer

Hello and welcome to BP and asking that question!  I have heard opinions from licensed real estate people  and regular investors.  People who have licenses say you should get a license and pure investors that say to save the money.  Having a broker license active for about 30 years I do not like the rules or guidelines.  If you have the time and money I would say it is worth what you have learned and networking you can do at the classes every two years (in Texas).  There is no guarantee that you will make that networking pay off.  There are a few guidelines that suck and you know of at least one.  There are several others that force you to be honest in a way that will hurt you with some from other people.  A bunch of people that are typical customers of you think that licensed people are crooks.

It really depends on what you thing and if you will ever have a partner.  I currently think that the hieratic ones only care about making money.  I lost my license thanks to my wife hiding a renewal from me because I had a brain anuerism and a stroke about 6 years ago and when I called them they told me I had to start over in spite of what I hanve spent.  Now you do not have to have a license to be an investor and you do not have to worry about the real estate guidelines.

Good luck to you!

Jon Nelson · Answer

I was a investor for 5 years then got my license I help a few friends and get a referral fee on my investments since they are out of state and that works great. The only problem I had was when I wanted to invest here then I could not work with my 2 investor friends since it was a conflick of interest.

Alexander Friedman · Answer

@Adolfo Cuellar Thank you so much for your thoughts! It's very heartening to hear that kind of optimism from someone who's both in the Portland market (which kind of intimidates me to be honest) and only a few years in to their career. Would you be willing to meet for coffee Adolfo? I'd really like to pick someones brain in person, who was where I'm currently at not so long ago, if you have some time.

Alexander Friedman · Answer

@Michael Lee Thank you for your perspective Michael. I appreciate the help.

Alexander Friedman · Answer

@RJ: Thank's for that perspective RJ. There's something about this thats confusing to me. maybe you could help me with your thoughts: Is there any reason why a broker wouldn't want an agent who's main focus is to be an investor? I mean if you're at a brokerage and you're focusing on finding deals for yourself and just using your license and MLS access to your own advantage as an investor (as opposed to representing other buyers and sellers for the brokerage) would that be some kind of "no, no". Would they care that your not producing in your capacity as an agent so long as you're bringing them commission splits from your own deals? How does one "be an agent" without getting distracted from investing and not get let go from the brokerage?

to become a real estate agent or not?

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