Why most real estate Real Estate agent are not as successful as that they want to be?
According to Salary.com, in 2019, The average real estate agent commission is $41,289. After taxes and expenses in that “salary” will be just barely above poverty level. And I thought we are in this business to get rich? What happened?
By no mean I am an expert. But during the past 4 years of being a full time realtor, and 8 years of being in real estate. I do notice a clear different between a successful real estate professional and the one who is not. The one that have a great lifestyle, and the one that struggle to pay the bill. Even within my organization, I often see a clear different of people people who left, who stay, and people who thrive.
Let’s collaborate using the platform below on why most real estate agent are broke, and how we together can address this issue.
1. Hang out with the wrong crew
I could not stress enough how important the people you surrounded yourself with. If you could name the 5 people you hang out the most with, and I could tell who you really are.
This might be sound hard to you but if you have unproductive friends, you need to drop them and find new friends, foster new relationship. It’s ok to reach up in relationship.
Find a successful real estate agent in your local area and figure out a way you can add values to their business. Go to the networking event that they go to. Ask for the class they took, or the training they did. This is by far fastest way to propel your business into the right direction
2. Only know how to make money when the market is up
Most real estate agent only know how to make money when the market is up. That’s why everybody gave up their license in 2008. Market always have 3 cycle: Up, sideway, and down. Enjoy the ride when buyers and sellers are blowing up your phone. But understand when the tide turn you have to be ready as well.
Learn how to operate the business when the market turn:
- Do you know how to work with distress seller?
- Do you know how to work with investors? Investor buy the most when the market is down.
- Do you have the ability to represented hedge fund such as express offer at your firm? Hedge fund buy when the market is up down or side way
- Do you know how to list REO?
- Do you know how to list shortsale?
- Do you do commercial?
3. Comfortable – It’s all in your head
You can and will get comfortable after a certain amount of time spent, and income earned in real estate. Complacency will set in.
Remember progress = happiness. Always make progress. always growing. The day you stop growing is the day you start dying, Whatever you do, make progress
Call the people that inspired you the most and talk to them when complacency set in
If charity is your thing, great. Buy a yacht if you have to. Write down a 100 things that you wants and stretch your brain out. Do not coast! You are way too young to coast and you haven’t made a dent in the world yet.
Leadership development book such as the John Maxwell Series will help a lot. It personally help me see a higher purpose in my work and career rather than just making money. Some are heavily motivated by money, which is great. Some of us are not and simply very content with what we had so we have to find something else to keep us going. Have that ambition, and keep it.
4. Time & Task
Perhaps one of my biggest challenge after leaving my corporate job is time. I use to have project, objective set up by..my boss. Too bad, I do not have one anymore. I have to learn how to set up un-interrupted time to do important task that will help elevate your business.
I use tool like trello.com to help manage my task. Turn my phone to air-plane mode when i need to get something done, like typing this blog.
I also set a clear boundary between work and play. Unless it is emergency (and as we know, most thing are not urgent in real estate) All external related call and txt message after 6 PM will be respond after the the next day, and Sunday is a social media diet day.
Some people are proud of working until midnight for their clients. I am not. If you can’t get your sh*t done before 6 PM, then you are distracted. This has help me tremendously and allow me make the most out of my day. my cut off time is 6:00 PM
Structure your days and work your calendar. Don’t let anyone interrupt you. “Eat the frog 1st thing 1st in the morning”
5. Financial literacy
I just realized that realtor are some how not the best when it come to money management.If you give them ten dollars, they will spend 10 dollars, if you give them $100, they will spend $101!
It is of course easier said than done. Life will set in. emergency will come up. If you don’t have a plan. No amount of discipline will help save the wealth that you accumulated over time. I used to be an equity rich, and cash poor investor. I do not know why until i learn how to improve my financial literacy, set a plan in and stick with it.
There is this old book called the automatic millionaire that have some great old principle. I took it to heart. Just simply have a plan to automatically put away your commission to invest into a long term stable asset will change your life. the key world here is automatic. Don’t trust yourself when it come to this.
Profit First is also a great book that teach you about money management. At the end only what you keep is matter. Don’t try to keep up with the Jones until you don’t really care about the Jones anymore!
5. EXIT strategy
Most people get into this industry looking for either location freedom, time freedom, and and financial freedom. Unfortunately most realtor ended up falling into another rat race. Realtor chases after one commission check after another commission check, spend them ALL, and can never get out of it.
Don’t get me wrong. It could be a great rat race, but do you have at least an option to stop? Most H.E.N.R.Y don’t (High Earner Not Rich yet)
Begin with the end in mind.
What are you originally set out to do? right that down every day.
If one day you can not work anymore, or simply decide not to work and travel the world for 1 year. Where would the equity be accumulating form? Where would be the cashflow coming from?
Is it from revshare?
Is it from single family rental?
Is it from multi family?
Is it from airbnb?
Is it from stock dividend? (my head is thinking about EPD right now I haven’t own it but want to jump in)
Is it from stable coin interest (I love USDC yield but it might get shutdown)
Is it from Commercial Real Estate? ( I have to get one)
And this is my shameless plug for realtor right here. If you look at all the investment above, every investment opportunity above will require some form of capital deployment in order to generate yield except one.
What is the one and only choice right now that allow you to generate massive return without capital deployment? And have an automatic plan to capture equity in the very company you own?
What is your EXIT strategy? i know mine.