All Forum Posts by: Johnny L.

After I got out of high school I spent a good 6-7 years of my life getting covered up in bad debt/decisions....then a lightbulb went off in my head....began climbing my way out...and now the only "bad" debt I have is our personal home....which Id like to pay off, but then that would limit my ability to grow on the investment side of my life for a little while....  but other than that...we use credit cards basically to gain airline points, pay them off every month......I haven't had a car loan/lease that wasn't paid by one of my businesses for many years now........any other debt i have is properly leveraged to our benefit.....and watching our net worth number grow each month has become more addictive than any other rush that you get from buying things you don't need! LOL

Re: student loans, personally I subscribe to Will Hunting's theory (from Good Will Hunting) "You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library" LOL......  I didn't go to college.....Obviously there are certain fields that absolutely require advanced learning (doctors, lawyers, etc)  but unfortunately most fields don't support the investment in your degree.  Whats the point of going $100k in debt, or even $50k just to come out and make $20k a year to start for a few years......  Plus I personally feel like the world changes so fast now that by the time new info hits textbooks and the classroom the world has already advanced a few years and your relearning everything anyway.  And I don't know ONE single employer/business associate that ever actually asked for a copy of someones records, degree, etc while considering someone for a job.  

That I said.....there is a part of me that wishes that I DID go to college.....there are somethings that have seemed to take me 10 years longer to learn, that in my mind I should have learned during that time period.....it took me quite a while to realize that I could learn anything I wanted immediately if I just applied myself and "Figured it out" as I like to say.

Didn't mean to get on soap box...and hope I didn't offend anyone.....I just know very few people whose investment in college paid off for them (other than drs, lawyers, etc).....most are still in debt, and have changed fields in the long run..becase nobody knows what they are gonna do with their life at that point in their life anyhow!! LOL

Do those agents have teams of people??

Very hard for them to do those levels in residential without a large team which cuts into profits heavily and has lot's of overhead. If volume drops you can go from making money to losing it fast. 

If the average house is 200k price for 2 million that is 10 houses a month for a closing about every 3 days.

With buyers you are limited because of scale. There is only one of you and no matter how many hours you work you can't do three places at once. Some brokers/agents take buyers on bus tours. In this way they can show their clients a large selection of properties at a time and hopefully sell multiple buyers on different ones.

Most brokers/agents do not go to this extreme as it cost a bunch of time and money.

New agents typically work with buyers as sellers will not give them the business yet.

Something to think about long term is this. As a listing broker you can do many properties at once.

Example: You find your buyer a perfect property. You write an offer. 5 other buyer bid. You have a 20% chance of winning the bid and closing on it to get a commission.

Conversely you are the listing broker/agent. You select one of the 5 offers to go under contract with and get paid 100% of the time unless the deal falls out. Now you know why most brokers/agent long term for residential move to focusing on the listing side. They can be anywhere with a laptop and move a deal along. They can list a large number of properties with just one assistant.

The 4 other buyer brokers that lost out get to go find another property again and waste time and gas so when something does close it is a reduced return.

I work with lot's of buyers on the commercial side but it is number crunching from my office, e-mails, and phone calls and not driving people all over creation like with residential.  

Johnny,

Like others have said, you don't have any bad habits yet, so it's easier to train you to do the things they want you to do them (Just be sure you're learning from top agents, not the ones who don't do any business).

Where do we find them?  You can look in the paper and see who does the most advertising (usually they'll show lots of listings) and you can look online to see who has a ton of listings.

Approach them.  Call them up or send them an email.  Check out Craigslist.

Here's a classified looking for a Real Estate Assistant in Colorado Springs: 

http://cosprings.craigslist.org/rej/4970941134.html

There's others too, you just have to look for them: 

http://cosprings.craigslist.org/search/rej

Rock on!

George have you ever heard the saying? " jack of all trades and master of none ".

If you are doing small time deals for mom and pop then you can be at all in one brokerages and do a little bit of this and a little bit of that. You might can eek out a comfortable existence but it's not my definition of success. Some rural towns only have all in one shops with local tenants.

Most suburban and urban core markets there is more than enough business to be a specialist and that is it. You work at a boutique firm and become a specialist.

My clients know I own my firm, that I am an investor myself, and that I have put together development deals. So I have 3 modes of experience to offer value and experience to them. If I said I will call you right back because I am going to sell a 200k house I would be laughed at. When you are selling on average 5,10 million properties and up it is all you do. People want the best representation they can get and not someone who dabbles.

-----------------------------------

Johnny

It's ALL HARD to do. Accept that fact right out of the gate. People who hear the realities of how hard it is and still say I want to do it have a fighting chance. Those who quit before they even start are doomed for failure. The key is to find out if RE is for you. Next step is to find out what kind of RE suits your goals and lifestyle.

For example residential with nights and weekends if you want to be Monday through Friday doesn't make sense. If you like looking at reports and finding the last cent to save and talking to tenants then maybe commercial property management is right for you. If you like constructing a piece of a puzzle and how the government works and functions then listing and selling commercial land for development might work.

Rather you want to be an investor, agent, broker whatever it is NOT easy money. People selling systems prey on others with hopes of making quick cash with little effort. If you are passionate and love what you do the hard work will be some of the most rewarding experiences you have achieving success and building a business to be proud of.  

You need to find your path first.

Is it residential, is it property management, is it commercial, is it land sales??

The possibilities are vast and wide.

If you are standing in a circle looking down many paths and going down one path and deciding to come back to your original point you are wasting time. It might take some discovery and time to find out by closing a few of each type of transaction to know what you enjoy and do not enjoy. Do not get heavily invested in one path to turn around and do it again. What I mean is it's okay to experiment and do say one house sale and one land sale etc. to find out what you like and why. You just do not want to do 5 closings and find out you didn't want to do this or like to do this type of real estate. It's not about the money but what you are passionate about. You will last a year and burn out if it's just about the money. I wake up everyday pumped about commercial real estate. Who is going to call me tomorrow?? What will their goals be?? What stories will they share of other investments or businesses they have owned?? Love what you do and people will be drawn to you for your passion and wanting to be the best.

Residential will control your whole life and hours for most. Nights and weekends will be gone for the most part. Unless you do a ton of residential closings it will be tough for you to make money. Say average house is 300,000 and as a new agent first year you have a 50/50 split for training. You do amazing for a new agent which would be 1 closing a month. You do 3,600,000 in sales times 3% commission for 108,000. Half goes to the broker before you pay for gas, supplies, dues, etc. so 54,000 to you. Deduct business expenses and maybe in the 40's and then pay uncle Sam his annual taxes. You are lucky to be in the 30's and if survival is 3,000 a month you are treading water. If you do one closing a month you are better than 90% of the residential agents out there for volume. Most have a second job and might eek out a few deals a year. Just do not want to sugar coat why most fail at this business.  

I do not have agents by choice at my commercial firm. I enjoy being one on one with clients and then doing my own investments. Very happy and not a lot of drama. New agents is a numbers game. Most brokerages know new agents might do 1 or 2 closings at a fat 50/50 split and then flame out with zero business if they can't generate new contacts beyond their existing sphere. Investments will help you generate passive cash flow and equity growth so you do not need to live deal to deal.

If you work for a commercial firm at least the sales prices are much higher with more commissions.

If you do not have much money starting out sitting a subdivision might land you a few hundred k a year in commission if you are good.

I have everything down to a science these days. I would rather say NO to 20 marginal buyers and say YES to 10 very qualified buyers where I make 6 figures per deal and have a long term relationship. I can get someone on the phone and know in five to ten minutes from questions if I want to work with them. Filtering the real buyers from the fakers or the longshots that have a low chance of closing is key. You want to run a high probability transaction business. Understand you are running a business and you can't be mediocre and stand around and expect closings to fall in your lap.

If you do residential as a choice getting the buyers tri-merge credit report pulled for free from your lender right away is key. Do not waste time with marginal buyers as they will suck away all of your time. You could have 5 closings with the time it takes to close 1 marginal buyer with a lot of drama. Most pictures listing brokers/agents use are crap for the exterior. It's an old picture, a steep hill, power lines are cropped out etc. So you do not want to drive around a buyer all over creation and they say we do not want to see those as we do not like the outside. Instead you can say pick ten and go drive the areas and narrow down to 3 or 4. Then call you and we can go see inside of those 3 etc. Anything to reduce your time and increase your income.

I am 40 now. I value my time very heavily and my clients and I have a mutual respect for each other and professionalism. You only get so many years, months, days, hours, minutes, seconds to do what you want in life so make it count............... : ) Once you start saying NO to everything and YES to specific goals your business will explode. You will spend time on things that matter to you for results and not be sidetracked by others.   

 Won't Everyone Be Doing The Same Thing....

This is the perennial question in Real Estate.

I don't know if I would qualify as a Top Producing Agent, but in my career (highest year in production was 75 Solo transactions) I would from time to time hire, or mentor newer agents.

Your perception that your reluctance to working with a young inexperienced agent is not always true.  

I know that I have a penchant for hiring newer agents because they have NO bad habits.

You have a lot going for you!  Don't sell yourself short, especially if you are a motivated "Go-Giver!"

Have a Powerful Sales Day!