Updated: Jul 12
I know this is a question that many non-real estate professionals ask often, I get it, but here's the way I look at it...
I’ve been recruiting and hiring agents for well over a decade. I have always loved hiring and coaching new agents. With new agents you get a blank slate, so you don’t need to help someone break away from “their way” of doing things before you start, you get to just go for it. You get to help agents get used to the fact that their main priority every day is lead generation, the volume of which tends to take some acclimatization. You also get to hear the goals people set for their first year in real estate… and recently the goal has gotten a LOT bigger.
During my real estate career I got to watch a family member go through law school. She worked incredibly hard. She got good grades, took her undergraduate, she studied specialities, worked evenings and weekends in her internship placement, networked, got a great job… and made ~70K her first year. With a law degree, 7yrs of schooling and internships and a sizeable investment.
Cue the new realtor, with their 6 month course and $5000 investment stepping up to meet their future broker, team rainmaker or coach…
So what’s their typical number? It used to be $100,000. For the past decade this was the number almost everyone wanted when they got into real estate. It was so predictable that I had the math laid out in advance when people applied to join my team. “Oh great! Here’s what you need to do: X Calls will create X appointments will create X clients which will create X dollars… Show up on Monday and I’ll start training you”.
With inflation, the recent boost in housing prices and, well, maybe a pinch of misinformation provided by they HGTV network, the new numbers we are hearing are somewhere between $150 (occasionally) and $250,000 (more frequently).
So what gives? What is it that makes agents think that they are entitled to so much money for a job that takes less investment than becoming a certified mechanic? Are they being unreasonable? Is there a reason for all this? Are realtors really just greedy?
Okay, so I’m setting you up. The honest truth is I don’t think that we are. Here’s why:
You Can Set Any Goal You Want...BUT
You can set any goal you want, but you still don’t have a clue how much you will make. In real estate, your business is subject to a LOT of variables, not the least of which is the market it’s self. If sales drop by 50% (like they did last year) it WILL affect you. Could you still earn the same amount? Sure, but you’d have to work twice as hard or have a different strategy to keep pace with what worked previously. Taking outside variables out of it, if you’re new you also don’t know how long it will take for you to develop your skillset and confidence. Don’t underestimate this!
This means that setting a goal which allows you to cover your life expenses and nothing more is actually really risky: if you come up short you won’t have enough to live!
You Can't Slow Down Once You Reach Your Goals
Psychologically, people tend to slow down when they get close to their goals. Have you ever seen one of those videos of the marathon runner who thinks they’ve got gold tied up a few hundred feet before the finish line? They are jogging in when another competitor comes up from behind and zooms past, or worse, they trip and fall injuring themselves. It happens with business goals too Once close to a goal, many people will instinctively relax a little. Setting big goals helps you make sure that you don’t sell yourself short of your potential by keeping the finish line just out of reach.
Systems Are The Difference Between Scaling & Failing
Big goals force the creation of foundations that will scale with you, after all, if you don't have systems, you're going no where fast. I’m a systems guy. Finding the way to do something with efficiency and repeatability has been a huge factor in my success. Everything from how I generate leads to how I onboard my new clients to how I work out, to how I prepare a favourite meal… I’ve got a system. If you create a system that’s works well-ish for your business as it runs today it will serve you for your current needs. But what about when your business is 3x or 5x or 10x the size it is now? With home prices as high as they are you can live off a business selling 6-8 properties a year in many areas. What will your system look like when you sell 60-80 houses? It probably won’t do at all.
With our agent success communities like FlipSpace and Startgame, we knew from the outset that these groups would eventually serve tens of thousands of people, so we built all our agent communication systems for that level of scale, even when we only had our original 24 member launch group. (Shout out to our OG crew - you know who you are!!)
Creating a system up front envisioned for your ultimate business will force you to slow down a little, yes. But in exchange you’ll have a business built on foundations prepared for scale and you won’t need to rebuild from the ground up every few years while you grow. Go slow to go big. It’s worth spending the time now so you don’t spend 10x the time in the long run because things don’t work.
When You Don't Know What Your Capable Of...Yet
I got into this business when I was 24. Honest truth, I was a roadie before I got into real estate. I had shoulder length dreadlocks and I’d never sold anything in my life. I got in because a friend told me I could make good money and I wasn’t attracted to the lifestyle of my previous work environment before. When I started in real estate I thought the brokerage gave you clients and off you went. I literally had zero clue what I was getting myself into! Fast forward a few years and I started to look around and realize that some people weren’t JUST selling houses, they were building huge and massively profitable businesses.
Fast forward a few more years and I’ve got a team of cover 30 people, I’m teaching and coaching all over the country and I’m flying around the world every few months to meet and mastermind with the best in the business.
I don’t care if you’re brand new or you’ve been doing this for 20 years. You don’t know what you’re capable of. Not only that, but you’re also capable of more than you are right now. Selling more, creating more, taking more money home, everything. Why not live a life where you challenge yourself to see what you can make of it and be the best that you can be? You know it's possible, so why not create a business that gives you all of that and more?
Alright, I’ll get off my soap box… in a minute. Because seriously, you should push yourself a little and see what happens.
So, are we greedy? I don’t think so.
At the end of the day, starting a business is a risky move, and make no mistake, real estate IS a business. It comes with all the same (or more), of the typical pain points of any business you get into. So if you're someone who wants to take on the risk of business ownership, I think having your revenue be top of mind just makes good business sense. No one on planet earth goes into business, or shouldn't, to not make money. You must remember, it's easier for most people to sit from the 'nosebleed' section and make claims about who's greedy and who's not, the bottomline is you are the one taking the risk and how you perform and reap the benefits is all on you, good, bad, or ugly, it's on you...not our friends in the nosebleed section of the arena. If you’re taking the plunge in real estate or reinvesting and moving your business up to the next level, I think you deserve every little bit you can get your hands on.
My perspective is that you earned every single bit of it when you tossed aside the comfort and predictability of a typical 9-5 job and since you’re here, why not add a couple zeros on the back end of the goal you wrote? This is the time to go big or go home and prove to yourself that you are capable of this and SO much more.
I cannot wait to see you at the finish line!