Residential Real Estate to Development path?
Hello, I'm new to this forum and career.
Passed the real estate broker exam.
No college degree + not many connections, so I don't have much to offer commercial brokerages, but most residential brokerages offer training and will employ about anyone with a license because it costs them little to nothing if they fail.
My theory is to build a track record of completed transactions and gain connections in RRE, then use as leverage to get into CRE, with the goal of starting a development team once I build up enough credibility/ capital.
Is this possible?
Should I sign with a big franchised brokerage and do SFRs for resume? or boutique without as much name recognition, but that brokers more investment deals that I could learn more long term skills from?
Appreciate any and all feedback.
So, not sure about your age/resources/background/etc. (not that it really matters tbh), thus, this advice may or may not be appropriate to your circumstance, thus adjust accordingly....
1. General rule - Experience as a residential broker will have very little value in much of commercial real estate (near zero in institutional real estate), but there are crossover examples and exceptions on the "local level" in many cities. There is the concept of the "resi-mercial" agent (usually said derogatorily), but there are tons of small deals, mom and pop tenants, and other transactions that you could service with training/experience.
2. If you really want (or care) about a career in commercial/institutional real estate (FYI, that is pretty much the focus of this forum), then go to college part-time while you are doing residential sales. Major in something like finance (or even real estate if a local school has it), and then try an intern at a legit commercial firm and then jump fully when time is right. The institutional brokerages will care less if you are a major producer in residential these days, it's too apples and oranges. Smaller/mid-tier brokerages are a different story, but you could probably get hired there now if you really tried (will be same deal, 100% commission, minimal support as in residential).
3. Development/entrepreneurial ventures are just that. Meaning, you can do if you can do. Again, your ability will go along with your skills, network, background. So if you want to develop SFHs, townhouses, small commercial centers, etc. Then the background and network (i.e. the money) from residential could serve you well. Technically, rehabbing houses IS a form of development, and people do scale up. I mean, this is a world with no restrictions but no handouts either. If you want institutional capital, then you better have the background they want, which is totally different.
Personally, I think you should just start at whatever you can. Maybe find a local brokerage that does both residential sales and commercial sales/leasing. A good broker may mentor you on both. I'm going on an assumption that you are "young" (WTF that means, just less than 30 for my purposes).... So, you can start here then go to college or whatever. So, TL:DR, it's great to start the way you are thinking, just be realistic about the path, and adjust as needed (i.e. you have all options ahead of you).
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