How do you start a successful real estate career in Florida?
Whether you're interested in just earning some referral fees on the side or if you want to become the next top agent, join today's episode of Ask the Instructor to learn more about getting started!
If you've seen people become extremely wealthy in real estate I challenge you to find somebody of significant wealth where real estate is not part of that equation or financial freedom or whatever the case may be and show me exactly where real estate is not part of that picture because every person of some considerable amount of wealth is using real estate to grow that wealth.
Now, a lot of the people that are millionaires and billionaires are using real estate as an investment. Now, you may want to become a real estate investor someday yourself but you know that whole thing it takes money to make money.
It is true with investing because investing in some sort of asset whether it be real estate or stocks or whatever the case maybe it's usually going to require input on your part in the form of money.
- Real Estate license- if you have this, it makes it significantly easier to invest. It is because the commission that's already pre-negotiated that the seller will pay already goes and counts for usually like 2 to 3% of the sale price so that usually covers most of your down payment especially if you're using an FHA loan or other types of low-down payment types of mortgages.
- Referrals- it is one benefit that almost anybody could tap in another one. So, if you have an active real estate license you could refer a potential client to a practicing real estate professional who's paid to join the realtors in the MLS and done all these other things to build up their real estate business so they could serve their clients you don't have to do any of that, you just get the license register with a referral broker and then you negotiate a referral fee.
- Referral Fee- the amount you will get from referring someone in the real estate business. The percentage may vary. Referral fees might be 20%, 25%, maybe as high as 50% you can negotiate whatever.
For example:
If this is a $10 000 commission even if it was only 25% that they agreed to, that'd still be $25 00.
A good quality done-deal= some negotiating power (to negotiate a higher referral fee).
Are your finances going to be able to keep up?
If you guys haven't seen what's been going on with the value of the dollar, you could see it in gas prices, you could see it in food prices, you could see it in the rising minimum wage you know we talked about this years ago on here about higher minimum wages it causes everything else to be more expensive because the workers are required as part of the process to be able to buy whatever thing it is that you're buying cost more money.
- Real Estate appreciates at rates faster than inflation- one of the significant advantages of investing in real estate. When you see real estate prices going up right now is inflation.
- Inflation- is a huge driver and the great part about real estate as you don't need to give yourself a raise, the market's already giving you a raise just by the prices going up you could give yourself a raise even still just by selling more real estate.
So, real estate can be extremely lucrative, it can be extremely profitable but you have to have a plan for your success, you have to have a plan, and you have to get started so that's what we're talking about.
What are those initial steps?
- Start with just some basics about the licensing process and what it is that you need to do if you want to get started in getting a real estate license.
- Do a COMMISSION CALCULATION- Your commission could be more than or could be less than. Always remember that there are no standardized or fixed rates of commission.
- Price Fixing- an illegal thing to do when there is a fixed rate in calculating commission.
- National Association of Realtors- the largest trade organization in the world who gather a lot of statistics such as the following:
a) How many hours on average a realtor spends to close a buyer?
b) How many hours on average a realtor spends to close a seller now on average for a buyer?
According to the National Association of Realtors, this $9 618 takes about 24 hours working with a buyer.
So, $9 618 ÷ 24 hours = $400.75/hr
But, if we're making $9 618 as our commission but now we're doing that in only 8 hours.
So, $9 618 ÷ 8 hours = $1202.25/hr
Now, let’s find out the number of hours in the day if you're going to work every single hour in a year.
365 days a year x 24 hours a day = 8760 hours/ year
$1 000 000 ÷ 8760 hours = $114.16/hr
Remember, if you have an active license then you could earn a referral fee for passing a deal along with an agent.
- Know the right broker for you then proceed on activating with a broker.
A network of people makes the real estate work. That's how you do business in real estate, there's a very small portion of the sale that we're actually directly involved in that's the reason why these numbers are so low here of like 24 hours and eight hours of working time. There's more to do when you're working with a buyer but there's a lot of other parties, a lot of other moving parts that are helping you along through the sale process to get to the actual closing and it's a group and a team effort. So, you know even though you're an independent contractor, you're registered with a broker, you'll have all these different professionals you'll be working within the transaction so you really do have a team, wherein that's all there to achieve and determine success which is the CLOSING. It is such a cooperative environment.
