I believe that investing in real estate is the best path to realizing the American Dream, and I was fortunate enough to have a great teacher when I first got started at the ripe, old age of 23. I eventually went on to get my real estate license, but I only used it for myself. In fact, I didn’t want other people knowing I had it! When people would ask if could help them buy or sell a home I said “No!” Ha. I can laugh now. As I progressed in my investing, I was often invited to be a guest speaker at various real estate education seminars. I was even on the radio a few times.
That led me to help teach others how to invest. The students I taught always asked if I could be their real estate agent. Once again, I would politely say “No.” I am notoriously stubborn. After about the third class I decided I would be a nice guy and help two students from each class by representing them in the field. I wasn’t too excited about the money–yet! When I told 25 students I could only help two, I learned one of the fundamental laws of marketing–the law of scarcity. After I realized how much demand I created by making myself scares, I decided to command a minimum commission from the investors I taught. Something very important was happening while all of this was going on. I was creating a system for using my license as an income producing asset. My bachelor’s degree in computer science and 18 years in banking systems and operations was paying off big time. This system enabled me to keep on investing and at the same time break all kinds of records in real estate sales. One year, 2008, at the height of the great recession when half of all real estate agents got out of the business, I single-handedly serviced 110 clients with no team or any assistance of any kind. In the middle of the worst economy in eighty years, my real estate agency business was growing while most others were dying.
If you’re an Investor who is, or is considering becoming, a real estate agent, or you’re an agent who is, or is considering becoming an investor, learn how to leverage your time to make more money without more work.
The Goal:
Financial Independence
Everyone one of us, including you, wants to be financially independent. You think you know what you want, but I can tell you that what you need is to be financially free.
A Tale of Two Roles
Over the years, I often thought I was the only investor who went on to get their real estate license. Every now and then I would come across someone who, like me, was an investor who, usually out of frustration, obtained their real estate license, too. And, just like me they really didn’t want other people knowing that they had it either. In fact, in almost all the investor courses I had taken and investor books I had read, the authors usually created the impression that it really wasn’t necessary for an investor to get a real estate license. Some of these real estate gurus were actually a little anti-real estate agent! In their eyes, real estate agents were very expendable and were simply another tool and not even really necessary. So, real estate agents could be used and not thought of once the investor got out of them what they wanted. No wonder so many investors struggle! Ironically, I discovered that many of these gurus actually had their real estate license! The bottom line is that investors rarely figure out how to find a great real estate agent who really knows what they’re doing when it comes to investing, and investors rarely make an effort to understand real estate agents and the role they can play as a valuable team player on the investor’s team. The primary role of the investor is to invest profitably. In order to do that, he or she needs to run their investing empire as a business. And, in order to do that successfully, he needs highly valuable players on his investing team.
Real estate agents almost never invest. I have only found a few who started out as real estate agents and then got into real estate investing-I mean in a meaningful way. I have observed in almost every instance that agents who went on to invest invariably apply the rules of the owner-occupied world of real estate to the investor world of real estate. It doesn’t work that way; it never has and never will. The two worlds have two completely different sets of rules. I call these the rules of engagement.
I have also observed that most real estate agents really don’t want to work with investors. Real estate agents are taught to work primarily with owner-occupants who want to buy or sell their own homes. They are rarely, if ever, taught how to work with investors. In fact, a lot of real estate brokers and experienced agents tell other agents not to work with investors because they waste your time. That’s because they simply don’t understand investors and the world of investing. They are trying to treat investors the same as they would treat an owner-occupant. That doesn’t work. Everybody gets frustrated and everybody gives up because they think the other person stinks, or doesn’t listen or doesn’t know what they’re doing.
I can tell you from firsthand experience that it can work and it does work. I have been doing it for a long time. I actually prefer working with investors because, unlike most owner-occupants, they usually know what they’re doing. They are efficient, and I get tons of repeat business from them. I don’t have to keep looking for more and more new customers. I have all the customers I can handle. There were times when I was actively practicing with my real estate license that I would have more than twenty contracts going at the same time. And, remember I had no help. I was still investing myself and even managing several dozen of my own properties! I did it by understanding both roles of investing and real estate agency, and I developed a system to make the most money with least amount of work!
What Comes First, The Chicken or the Egg?
I am often asked “Should I get my real estate license first before I start investing,” or “Should I state investing first before I get my real estate license?” I’m not a lawyer, but I have learned to appreciate the stock lawyer answer to almost every question–it depends!
If you are young and just starting out, or you are more experienced in life (i.e.–older) and starting over, you may need to generate cash flow like yesterday! If that is the case you likely don’t have cash saved away anywhere, either. In this situation, I suggest getting your license first. It’s quick and easy. You can then service the people you already know (your circle of friends, family, neighbors, etc.), and you can also participate in wholesaling. With wholesaling, you control and profit from property without actually owning it. Wholesaling is also a great way to grow your database of investors and future partners in larger real estate investment deals like apartment complexes, shopping centers and office buildings.
So, if you need cash flow and you don’t have cash saved, you need to generate commissions A.S.A.P. and save some of those commissions!
If you have some savings and need cash flow then perhaps you should invest in a few rental properties first to generate some passive income. This will give you a more solid base from which to operate. You could also get your license at this time to generate some commission income as well. At the very least, you get to earn commissions on your own deals.
If you are already investing, I suggest getting your license A.S.A.P. You are not claiming additional income that you should be claiming. As mentioned above, you can earn commissions on your own deals, and if you locate more investment opportunities that you can’t take on at the moment, you can present them to you clients and at least earn commissions. Of course, you could wholesale them too by either doing a net listing (in some states) or a straight wholesale through a LLC where another agent does the work and you can earn a referral fee. These are a few opportunities that we will explore later.
If you are already a real estate agent, I suggest you get in the investing game A.S.A.P. I’m not suggesting that every real estate agent should invest, but if you are a real estate agent the rest of the world looks at you and asks “If you are an agent then why don’t you own a lot of investment property since you know so much?” How’s that for applying pressure? A much better reason is that you will be able to leverage your real estate license and use it more as an income producing asset. Moreover, there is no other investment in the history of the human race that has had more impact on more people’s lives. If you are a fully engaged real estate professional then you are by nature an entrepreneur. As an entrepreneur you should naturally gravitate towards real estate investing. If this does not describe you then I assume that you view your use of your real estate license as job instead of using your license fully as an income producing asset that is being run like a business.
The difference is that with the former, if you go away on an extended vacation and don’t work on your vacation then your production will suffer. I know it will suffer because in addition to not being able effectively service your clients you will probably not be lead generating, either.
In the latter case, when operating like a business, you will likely have someone executing your lead generating activities for you, and you will likely have team members who can continue to take listings and work with buyers. The bottom line is that if you are a true real estate professional then you really ought to be thinking like an entrepreneur and operating like a business.
About the Author:
Gary Wilson is widely considered the leading authority on teaching Real Estate Investors and Agents alike how to leverage what they’re already doing and create massive new wealth and income.
Gary has been investing in Real Estate for nearly 30 years building a rental portfolio worth millions of dollars, flipping other properties and even wholesaling. He has been a licensed Real Estate agent for more than a dozen years and Broker for more than half of that time, creating the fastest growing Real Estate brokerage company in Pennsylvania during the Great Recession, while others were shrinking by 50%. Gary also went onto create an Appraisal business, a Title Closing business and a Property Management business that grew from 40 units to nearly 500 in less than 3 years with virtually no marketing costs.
Gary has grown into a sought after speaker, writer, teach and coach to investors and agents across the world. Fortunes have been made by those who follow Gary and implement his systems of creating massive wealth and income by using their Real License as an income producing asset to serve the Real estate investment community
Gary spends his personal time participating in high adventure activities, visiting friends and family far and wide and promoting his greatest accomplishment – The Healing House Foundation. A portion of all proceeds from Gary’s business ventures goes towards the support of the Healing House Foundation – a Non-Profit venture that serves families who are healing and rebuilding their loving relationships after suffering from the wounds caused by the illness of addiction of a loved one.
thank you Gary
Living the dream, thanks Gary