I often get asked, “Should I get into real estate brokerage?” I usually tell them “No”, mostly because I don’t want any extra competition…but I always tell them that it’s an incredibly risky business to get into with extremely high rates of failure. It’s important for new brokers to understand what they’re up against before they get started:
- You probably won’t make any money for at least a year.
- You will work extremely hard and you may not see the fruits of those efforts until years down the road (If you’re still in the business).
- There are high barriers to entry. You need to figure out a way to separate yourself
If you fully understand the risks involved and still want to take a shot at this real estate casino, here are a couple points to consider:
Marathon Not A Sprint
While in our day-to-day life we can push a button and anything we want shows up at our doorstep, instant gratification is not the name of the game in commercial real estate. The comforts of a 9 to 5 job, a salary, a proven path to success are also not standard in the business of multifamily brokerage. It’s an uncomfortable world, and it takes a considerable amount of time to get adjusted to this life. Your sole focus cannot be about your commission check; your focus always has to be the relationship with your client first. It’s critical that you stay disciplined and understand that building a career as a broker is a marathon and not a sprint. Like any good relationship, it take time to build trust, and it takes time to understand how or if that relationship can be successful. Individual commission checks come and go, but a mutually beneficial relationship with a client can last a lifetime and lead to an infinite amount of positive results on your career.
Effort vs. Expertise
Get your calculators out. I’m pretty sure there’s an equation for effort vs. expertise that you can use to figure out how to be a successful broker. When you’re starting out, your equation looks something like 90% effort vs. 10% expertise to sell a building. No way around it; you’re going to need to rely heavily on the effort factor to be able to make up for your lack of expertise early on. But over time, you will develop an expertise for what you’re doing, and you’ll be able to work smarter instead of harder. If it used to take me 90 phone calls to sell a building, now maybe it takes 10 phone calls or less to achieve the same result. Once you’ve mastered that equation, and you’re able to rely more on your expertise than your effort, you’ve put yourself in a position to really be successful. You can never get too comfortable either; you still need to sustain high levels of effort to retain your clients over the long haul.
I called it a “Real Estate Casino” earlier, but that’s not the full truth. There is definitely a piece of luck involved to being successful, but the more effort you put in, the odds of getting “lucky” increase drastically. It’s an eat-what-you-kill job: come to work hungry.