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Should You Become a Realtor??

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Should You Become a Realtor??

Hello readers, we are back at it with ways to get started investing in real estate.  How about being a realtor?  Not investing.  Sorry.  

Do Realtors Understand Investors? NO! Well, Some Do

Just kidding.  Kinda.  While being a realtor isn’t investing, it is a great way to get involved in the industry and learn about the parts of a transaction.  When I bought my first house I thought that every realtor must be an investor since that is the industry they work in.  Wrong.  That couldn’t have been farther from the truth.  Most realtors I have met don’t understand investing.  Many mildly dislike investors.  They certainly aren’t incentivized to learn about investing themselves.  Why would they?  They are sales people.  Realtors make their money when transactions happen.  Therefore making lowball offers on behalf of investors that will never get accepted is not very appealing.  And flipping houses is a lot of risk compared to a healthy living that can be made on commissions from sales with very little risk.   Rental returns also probably look unappealing and risky in comparison to sales commissions.  It is just a different mindset.  Now, this is obviously a lot of over-generalizing so forgive me.  

My Wife is One

After our investing business was growing and we decided that Veronica would get her license,  she went to a traditional brokerage and the support for investors just wasn’t there.  Worse than that; it was discouraged.  The focus was on getting as many traditional deals as possible because this is what feeds money to the brokerage. The cool thing is that we found a brokerage designed for investor agents.  This is for those odd creatures that understand both worlds and exist in both.  They don’t discourage doing your own deals and they involve your business partner (if you have one) in every aspect of the brokerage even if they aren’t licensed realtors.  This brokerage is StepStone Realty.  In addition to being a place to hang your realtor’s license; it is a network of investor-minded realtors who learn from each other and collaborate on projects together.  We have borrowed money from members.  We have passed deals to other members.  We hope to lend to other members soon.  And we are constantly learning new techniques from members and the Broker and CEO.  It truly is a mastermind group that raises the performance of each member.  They are a Texas-based company so this may not be helpful for those in other states but this model is becoming more and more common so I would suggest considering this type of brokerage if you want to be an investor and an agent.

We Both Are Investors

Investors are their own worst enemy.  As long as I am making all of these gross over-generalizations about realtors, let’s continue with Investors.  Investors are cheap.  I don’t mean thrifty.  I don’t mean budget-conscious.  I don’t even mean frugal.  I mean investors are CHEAP!  I feel I can say that from the perspective of being one.  We want to save at every corner to make the deal work.  It’s part of being successful.  However, we also need to compensate our team members and our realtors are one of those team members.  But what if we become the realtor, can we still be cheap, you ask?  Well in fact, you can.  Being a realtor can allow you to make your own offers without inconveniencing a realtor who isn’t making any money off of their efforts with you.  And when a deal does go through that you are purchasing, you have actually created another profit center.  You can add about 3 percent to the deal that the seller is paying you as the buyer’s agent.  I think this is pretty cool.  And while we don’t currently buy off of the MLS often; I am certain there will be a time in the future where there will be more deals on the MLS than there currently are.  {Generalizations for entertainment purposes only; we aren’t all cheap and not all realtors hate investors.  I’d write more about this but they’re kicking me out of this Starbucks where I get my free WiFi because I haven’t bought anything in six hours.  Just kidding.  Maybe.}

Great For Flippers

And if you are flipping, you can reduce your sales expenses considerably by representing yourself on the listing.  Another cool option.  As you are hustling to get your investing business going; a few listings wouldn’t hurt at all.  This is a great way to generate some capital and still be in the industry.  You will learn a lot about pricing and negotiations.  You will see a lot of properties by showing them to clients.  You’ll see trends in designs.  You will learn your city’s market really well.  All in all, I would say this is a good way to get started in real estate investing.  

Barriers Are Low to Getting Started

The barriers to entry are low to becoming a realtor which is why there are so many realtors.  But it is also why there are so few extremely successful ones.  You may find that real estate sales are your thing and that you want to focus your energy on that.  And that is great.  Otherwise, I would see it like a side hustle to generate cash for your investing business.  Instead of any other number of side hustles; you could choose one that helps you build your knowledge of real estate while earning money to invest.  The classes can be taken online and are quite reasonable compared to college courses.  And the access to MLS (the multiple listing service) and all of the tools available can help you evaluate your deals from ARV (after repaired value) to days on market and many other metrics.  

I Think This Is Worth Considering

All in all, this could be a great way to get started and the skills will help you well into your investing career.  Remember that none of these methods we’ve talked about stand alone.  They can be combined for the greatest affect for you and your goals.  

I hope this has been helpful.  I also hope that you are hungry to improve your situation in life.  Focus is so important but knowing when to turn it off and be present for the best of life is critical.  So I wish you hunger, drive, passion, and the ability to always “keep the main thing the main thing.”

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