Switching to Investment Sales
I currently sell residential real estate and want to make the move to investment sales. Coming from a non-target school with a finance & accounting background, my goal was always to do something in commercial RE in a major city (preferably New York), but after graduation a few years ago someone in my family had medical issues that required me to stay close to home. I started selling residential real estate as a way to make money until the medical issues went away and never intended for this to be my career path, but apparently I'm good at this (selling 50+ homes a year) and now I feel somewhat stuck.
My question is, if you were making good money ($150k+ net) would you give it all up and start over to live in a big city? I know I'd have to take a pay cut and probably start as an entry level analyst somewhere to learn the business from the ground up, but is it realistic to think that in a few years I could be making the same or more money? I know this might be subjective, but what would you do?
Some of my concerns are that commissions in residential RE might shrink as technology continues to disrupt the industry and Realtors become less needed (to an extent). Also given where we are in the cycle, am I trying to break in at or near the top of the cycle with some sort of downturn in the next few years. Just want to hear some opinions from the crowd.
How much are you making per year? just curious how much good residential sales people make..
Last year I netted 152k after writing off all marketing expenses, car, gas, insurance, the occasional night out with friends as an "entertainment expense" for future clients.
In 1999 they said that mortgage and real estate brokers were going to disappear in a few years because of the internet. Everyone seems to be doing just fine 18 years later. In fact, I feel that in a time of digital everything, a personal touch from a knowledgeable broker can seal the deal.
Anyone remember Ditech.com? They were to be the end of resi loan brokers back in 2005. Same with Quicken loans etc. Now most of these places don't even originate, they sell leads, to, you guessed it, mortgage brokers, lol.
The sign of the cycle coming to an end is discount shops popping up everywhere. These popped up a lot in 2005/2006. 1% listing fees and what not. Btw, in the last 60 days I've seen many troubling things that definitely make me feel a correction is very close.
50 homes is a lot. I was once a resi broker and went commercial. Try to get those resi investors to exchange out of those houses and into units.
Agree, I also think the panic button is getting close.
As far as compensation goes, the typical answer I've seen here is that it takes anywhere from 3 to 5+ years to be making decent money in commercial sales after becoming a broker. FWIW, I also decided to do what you're asking about (e.g. moving to a big city, pursuing my interests in commercial real estate); if you do the same, keep in mind that you'll be put onto a draw -- a type of loan issued by your employer which you pay back through commissions -- or start out completely on commission. I say go for it if that's where your interests are.
I'm planning on doing the BIWS RE course to freshen up my excel & modeling skills. Has anyone landed an investment sales/capital markets analyst gig at one of the big firms (CBRE/JLL/Cushman/HFF) while living out of state? Besides applying and trying to get in touch with the decision makers at the firm, any tips to get your resume looked at?
To be honest if I were in your position I would focus on maximizing my success as a residential broker and personally investing in/developing (commercial or residential) real estate on the side. 150k is a lot for a small market, where I am assuming the cost of living is much less than any big metro, and if you continue to leverage off your past success to expand your brokerage deal flow and roll your earnings into savvy investments in your market (which I assume you are an expert in), in 30 years you might end up being one of those old men who owns the whole damn town.
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