Is being a realtor slowlane?

[Tyorke]

I was recruited by a high end residential sales firm in Manhattan to help them sell condos. I know one of the owners who basically told me I have the ideal make up to be a realtor.

I was thinking of spending 3-5 years selling these high end places, working as hard as possible and saving somewhere between $500k - $1M and then using that to invest in apartment buildings and other commercial real estate.

I assume there are always players ala SteveO and others who will be looking for investors to invest in their projects, right?

 

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[Tyorke]

Some people I've discussed this idea with are telling me I'm a dumbass for trying to be a realtor right now...but I see the Manhattan market turning here soon and with prices as high as they are, I can make $200-300k a year selling 6-10 homes. I can live on half that, save the rest and keep working it hard, and after a few years have a nice pot to invest.

And good call JScott...If I find I enjoy this side of the biz I can open a brokerage. Or I can start putting that money into apartments or something else. Either investing through someone else and keep selling homes to raise capital, or once I've built a cushion, start doing the apartment investing myself.

So being a realtor is more of my "means" to generate capital which can then be put into a fastlane business.

 

[I85]

Some people I've discussed this idea with are telling me I'm a dumbass for trying to be a realtor right now...but I see the Manhattan market turning here soon and with prices as high as they are, I can make $200-300k a year selling 6-10 homes. I can live on half that, save the rest and keep working it hard, and after a few years have a nice pot to invest.

No matter how great your idea and plan are, someone will always think you're a dumbass, it's all good. What is your plan? Why are people going to trust you to get their million$ condo sold, instead of hiring an established agent? What do you have to offer them that others do not? How much cash are you going to need to start? How much do you have now? Selling 6-10 house sounds A LOT easier than it is. I've never been anywhere in NY and could be wrong...but I'm willing to bet your market is very competitive. The 80/20 rule often comes into play with agents, but I wouldn't be surprised if it's a 90/10 rule there.

I was recruited by a high end residential sales firm in Manhattan to help them sell condos. I know one of the owners who basically told me I have the ideal make up to be a realtor.

I was thinking of spending 3-5 years selling these high end places, working as hard as possible and saving somewhere between $500k - $1M and then using that to invest in apartment buildings and other commercial real estate.

I assume there are always players ala SteveO and others who will be looking for investors to invest in their projects, right?

Not fastlane, quite the opposite, imo. Why are you wanting to become a realtor? Money? RE experience? Networking? etc. If you are in it for experience and networking, are you going to be investing in the same area and the same type of property? If not, it doesn't make sense to me. On the money side, your numbers seems quite optimistic(not that that is a bad thing...just know what it will take to really get there). In such a high end market, you're gonna need experience, connections and/or be one hell of a salesmen.

And good call JScott...If I find I enjoy this side of the biz I can open a brokerage. Or I can start putting that money into apartments or something else. Either investing through someone else and keep selling homes to raise capital, or once I've built a cushion, start doing the apartment investing myself.

Seems like you are not too sure why you are becoming an agent, I would figure that out first.

 

[Tyorke]

I should clarify one point here. I currently work for a development firm and make $70k a year and basically do it for the bonuses. Well there are no bonuses in 2009, and probably not for the next couple years at the soonest. I'm drowning financially in Manhattan. My wife and I like living here and want to stay.

So I decided I need to figure out a way to generate more capital for the time being. Being a realtor would basically be to pay our living expenses, get our debt paid off and then save what's left for investing.

That's the only plan as of now. Capital, capital, capital.

 

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[I85]

I should clarify one point here. I currently work for a development firm and make $70k a year and basically do it for the bonuses. Well there are no bonuses in 2009, and probably not for the next couple years at the soonest. I'm drowning financially in Manhattan. My wife and I like living here and want to stay.

So I decided I need to figure out a way to generate more capital for the time being. Being a realtor would basically be to pay our living expenses, get our debt paid off and then save what's left for investing.

That's the only plan as of now. Capital, capital, capital.

You have a destination, but how do you plan to get there on that road? That is what I am asking. The last thing you want to do is move to a "job" and end up being in debt even more and have no income. Are you going to be a listing agent for the firm then? Will you not need to find any listings? If so, are their listings priced reasonably or is their whole inventory sitting and doing nothing? What are their fees/commissions? Can you still work your current job while doing this?

 

[BryanC]

I like this thread because you're going through the same soul searching some of us are going through right now or already been through.

In my opinion, this decision you make about this move in your life may be the difference that decides whether you spend your life on the slowlane or the fastlane. If you're seriously interested in becoming a Real Estate Investor, it may be in your best interest to spend sometime at a Real Estate distribution center for a few years and familiarize yourself with the Asset. And if you can build some capital at the same time that can be converted into Real Wealth, that is also a good thing.

But, overall, you should continue focusing on the overall goal of building and acquiring Assets that produce Positive (+) Cashflow. That's really the overall objective because it is the only way to develop longterm income that will support expanded consumption later on in your career...

 

[Tyorke]

Another thing I should add...(if I haven't already)

I work in real estate right now. I am VERY familiar with real estate development and investing. I'm project manager on 2 deals right now with budgets north of $10,000,000.

My reasoning for working as an agent to generate some capital is because I'm working on salary + bonus here and for the next few years, that means only salary. The new construction market is dead, and even when it picks up, that means 3-5 years before any profit is realized.

I'm 30, $60k in debt and my wife and I want to have kids in the next few years and can't because of our finances right now if we stay in Manhattan. And for me to do my own FASTLANE deals, I need some capital and/or deal locating.

 

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[G_Alexander]

If you want to get into the Fastlane...

1. Move out of Manhattan.
2. Live off less money.
3. Get out of debt.
4. Invest.

You may have to give up your fancy lifestyle for a few years, but who said getting into the Fastlane is a smooth and comfortable transition?

ENTREPRENEURS LIVE THE WAY MOST PEOPLE WON'T, SO THAT LATER IN LIFE THEY LIVE THE WAY MOST PEOPLE CAN'T

G_Alexander

 

[Tyorke]

If you want to get into the Fastlane...

1. Move out of Manhattan.
2. Live off less money.
3. Get out of debt.
4. Invest.

You may have to give up your fancy lifestyle for a few years, but who said getting into the Fastlane is a smooth and comfortable transition?

ENTREPRENEURS LIVE THE WAY MOST PEOPLE WON'T, SO THAT LATER IN LIFE THEY LIVE THE WAY MOST PEOPLE CAN'T

G_Alexander

G_Alexander, with all due respect, I feel that this is a very presumptious post and you make a lot of assumptions about me.

How do you know I live a fancy lifestyle? (I don't)

Again, I'm not going to move out of Manhattan unless I am forced. If it takes me an extra 5 years to get into the fastlane, I'm okay with that. I understand both sides of the argument, but it's my life and that is what I choose to do.

How do you propose I get out of debt and invest without making more money then?

 

[BryanC]

You can always use the corporate architecture and raise the capital. The way I see it is, you're lucky to be living in the time you are living in because historically the world has never been this flush with credit, venture capital, and a monetary system that forces people to invest in production in order to retain purchasing power.

You really have a lot going for you that your ancestors didn't have that wanted to do the same thing. And if the Limited-Liability approach to business disappears after the current system collapses, you may never get the same chance you got here again.

Also, the difference between an employee and entrepreneur is this: If you have no money to invest and your solution to your money problem is to get a job then you're an employee. If you have no money and your solution to your money problem is to seek out an opportunity and raise capital you're an Entrepreneur.

The reason the slow lane IS the slow lane is because it's the slowest way to accumulate resources. Your purchasing power only increases linearly. Week after week, you build a little more but, the Government steps it's hand in to take 50%. On the fast lane I can increase my purchasing power in the snap of the fingers by getting an investor to cut the check. That's the power I have not following the slow lane plan.

If you go further and you break down the barriers your mind has created of an objective world that told you the only way to get resources is through sweat and toil. Then you begin to see that it's basically the other way around, you're supposed to manipulate resources and bring them together to create some kind of structure that residually renders a product or a service to human beings, then you'll be on the fast lane.

Like to me, it sounds like you are already there, you are just in the employment paradigm.

 

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[G_Alexander]

G_Alexander, with all due respect, I feel that this is a very presumptious post and you make a lot of assumptions about me.

How do you know I live a fancy lifestyle? (I don't)

Again, I'm not going to move out of Manhattan unless I am forced. If it takes me an extra 5 years to get into the fastlane, I'm okay with that. I understand both sides of the argument, but it's my life and that is what I choose to do.

How do you propose I get out of debt and invest without making more money then?

I'm not assuming that you are living outside of your means, it is just common sense that there is a high cost of living in Manhattan. And you supplied me with the information that you are 60k in debt.

You asked for advice, I told you what I would do.

I never said you shouldn't make more money. Just because you move out of Manhattan and reduce your cost of living doesn't mean you can't take the new job and commute. This is what I would do.

Move, lower my cost of living and commute to the new job. Your nest egg will grow faster.

It is all relative to YOU and how YOU want YOUR life to be. I now know you really like where you are living and that you don't mind taking longer to enter the Fastlane. Then by all means stay in Manhattan, take the job, pay off your debt and let it take a bit longer...just remember, that is not called FASTLANE. That is called working a J.O.B.

Just my .02

G_Alexander

 

[BryanC]

Additionally, reading G_Alexander's post and then your follow up. I'd say you're problem is you are definitely consumed by the reality of an employee. If you want to be on the fast lane, it's not something that take 5 years to get into. It's a change that happens now.

NOW IS YOUR POINT OF POWER. NOT THE FUTURE.

If you want to be on the slow lane, you work for dollars. If you want to be on the fast lane you build or acquire artifacts that produce dollars.

Those are decisions you probably unconsciously make on a daily basis. If you were not exposed to that difference before you read it in my post. Maybe you should wise up and see that you are either on the fast lane today and forever or tomorrow and never. It's the actions you do today that decide whether you are on the fast lane or the slow lane. Not some transition period.

 

[MJ DeMarco]

Being a Realtor is a "baby step" to the fastlane as it divests your time as a direct trade for hours. Instead of trading for hours, you are now trading to houses. The more houses you sell, the better $$ you make. So instead of "how many X hours can I trade" -- (limited by 24 per day) you move to "how many houses can I sell?" (which technically has no upper limit)

This is considered a "baby step".

Being a realtor certainly isn't a mechanism to generate long-term passive income (my definition of fastlane), as the minute you stop working as an agent, you stop making money.

That said, it may be a good way to earn startup capital for other -- more fastlane -- business ideas.

Or, if you were to become a broker, start a brokerage, and hire a bunch of real estate agents to work for you, that can ultimately become fastlane.

This is exactly how you make a real estate business Fastlane. Ultimately, if you open a brokerage and have 20 agents working for you, you would be engaged in a Fastlane business. I think this is how John Assaraf "went fastlane" and now, he is super Fastlane writing books and giving seminars.

 

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[hatterasguy]

How many of those million dollar condo's are they selling? I live on the outskirts of NY's RE market and I know a lot of agents, all are essentialy un employeed right now. You may want to go talk to some agents and see whats going on right now. The brokers are the last people you want to talk to, they are always looking for new heads to fill up office space.

The only saving grace you might have in Manhattan are the foreigners buying up "cheap" US property, but I don't know how much of that is still going on. The financial melt down last fall really hurt a lot of the people who buy those places.

Now is going to be a very hard time to become an agent; if you decide to go that route I would not plan on making any money for at least 6 months.

 

[hatterasguy]

G_Alexander, with all due respect, I feel that this is a very presumptious post and you make a lot of assumptions about me.

How do you know I live a fancy lifestyle? (I don't)

Again, I'm not going to move out of Manhattan unless I am forced. If it takes me an extra 5 years to get into the fastlane, I'm okay with that. I understand both sides of the argument, but it's my life and that is what I choose to do.

How do you propose I get out of debt and invest without making more money then?

His point is that you have to sacrifice now for the future. Be it a fancy car, or in your case where you live. If you want to build a big company you need to put all your efforts into it. You need to drive a junk car, live in a crap place, and put every spare penny and minute you have into it. So one day you can drive a Lambo and have the kick a$$ place in Westchester. In your case if you really wanted to you could commute into the city like a lot of other people do. You can live very well in many places on what you make that are reasonable train rides into the city.

 

[CashFlowDepot]

If done properly, it really does not take much money to invest in real estate..
So, your plan of waiting for 5 years before you start down the fast lane track is really not necessary. Don't think you have to wait until you have $500k in the bank before you can start investing.

However...

Getting your license and selling condos for a year or two will help you gain experience with negotiations and preparing contracts. You should also use that time to get more familiar with ALL aspects of real estate in your area - not just million dollar condos.

There's a much better way to buy real estate than going to a mortgage company or bank and borrowing the money.

During your 1 - 2 years selling condos, you also need to learn "creative real estate" strategies and techniques. Learn how to identify a good deal, how to negotiate, how to buy without real estate agents, how to buy with seller finance terms, how to find private lenders and/or hard money lenders.

Every week, make it a goal to call at least 10 - 20 FSBO ads - even if they are in Long Island or Queens or New Jersey so you get comfortable with asking questions, evaluating the numbers, and proposing creative buying strategies. Practice. Go visit with motivated sellers.

The worst thing you can do is say I will start the fast lane path in 5 years. Five years may never get here. Start working towards the fast lane NOW.



While you're selling condos - make it a goal to learn creative investing so you'll be ready to pull the trigger when you see a good deal.

 

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[Salinger]

I had to jump in on this one for my first post.

As mentioned earlier, real estate sales is, for most, a step in the fastlane direction. It's not just a salary. You are in control of your income and the upside is relatively unlimited. It all depends on how you approach your career. You need to treat your practice like a business. By this I mean you need to always be thinking of ways to leverage your resources. The most important of these, because it is the most limited, is time. Once you have enough income to support it, begin building a team. The ultimate goal is to be the owner of that team, which is always generating leads, managing listings, working with buyers, etc. in your name. Gary Keller, founder of Keller-Williams Realty wrote an excellent book on this titled The Millionaire Real Estate Agent. You might want to check it out.

The other thing to do is always be looking for deals for yourself. Being a Realtor gives you market knowledge. You will see many deals before anyone else. You can buy these deals, or find investors for these deals and leave in your commission as equity. With your background in development, you can create the deals and keep a piece for your self as the organizer or "syndicator."

This is how you build a real estate investment portfolio for yourself and how you differentiate yourself from average realtors and work as a "fastlane" realtor.

 

[hatterasguy]

Spending a bit over a year selling real estate was one of the better moves I made, IMHO. Made a bit of money, but that wasn't the point, I learned quite a bit and that knowledge is pretty helpful now that I'm on the investing side.

If you do it with the right mentality even if you don't make much money you will learn and can make money with that knowledge later.

 

[Ginotocino]

G_Alexander, with all due respect, I feel that this is a very presumptious post and you make a lot of assumptions about me.

How do you know I live a fancy lifestyle? (I don't)

Again, I'm not going to move out of Manhattan unless I am forced. If it takes me an extra 5 years to get into the fastlane, I'm okay with that. I understand both sides of the argument, but it's my life and that is what I choose to do.

How do you propose I get out of debt and invest without making more money then?

What did you end up doing?

 

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[MJ DeMarco]

What did you end up doing?

He hasn't been here in nearly 10 years. I doubt you'll get an answer.

 

[Ginotocino]

He hasn't been here in nearly 10 years. I doubt you'll get an answer.

Darn. I was just curious because I thought employees of real estate developers were really entrepreneurial with a great network. I was guessing he would've figured out a way to buy and renovate residential or commercial properties (or whatever his goal was) without needing the huge capital since he watches the executives in his company invest and develop.

 

[KassandraTB]

Switching to being an agent is a whole new world. You do have to consider the time it takes to get Licensed, trained, leveraging until your first sale. What's interesting is no one mentioned yet you might make 200k but you forget the high costs of doing business in that space. Like lunches daily to get clients to love you. The hours of calls. The amount of ads.

Being a sales agent has to have an end in mind that's not a paycheck. Example: learning so you can buy rentals or building a passive business. At the end of the day you traded a job for a job and you have to think differently.

Besides, there are ways to make it happen. Example I moved to have better real estate advantage in another state and now I'm very well and can live where I want.

There really is only 4 ways to make money on rentals. 1 cash flow 2 equity 3 tax benefits 4 appreciation. Play the investing game and you'll do well.

Remember there are creative loans to help you buy and live in a rental. Which is way faster in time to use an FHA and buy a triplex or fourplex just outside of the city and then move up through leverage than starting a whole new job.

Sent from my SM-G965U1 using Tapatalk

 

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