Should I focus on residential or commercial real estate?
Moderator
🚨When I get this question I generally ask people these four questions to help them determine what is best for them:
- Are you a connector of people?
- Do you enjoy emotionally guiding people through the largest purchase or sale in their life?
- Do you like running the math to figure out if something is a good investment in the short & long term?
- Do you like doing deals that makes business sense and have little to do with the touchy-feely emotional aspects of real estate?
Question #1 You need to connect with decision makers in order to be successful in this business. When I see someone that has over 500 real Facebook friends or LinkedIn connections it is generally a sign in the right direction.
Question #2 Residential real estate is very much about emotional intelligence. You may need smarts to pass your licensing exam, but you need emotional intelligence in residential real estate.
Question # 3 Both residential and commercial require some math, but commercial requires a significantly larger aptitude. Good news is , there are plenty of investment math courses available!
Question #4 Commercial real estate is nearly always about the opportunity and the numbers. If the numbers work, the deal gets done.
Anyone use any other questions to help people discover what path they want to take when entering the real estate business?
Comments
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I am seeking commercial real estate/finance and I have found a list of "top 20" CRE online. They have "talent network" or "talent community" to join. I am guessing a personal recommendation for these firms are most beneficial than "Cold-calling them," so-to-speak. The residential real estate firms have such a high initial (starting) costs, with over-all less commission returns, so it makes it seem more financially viable to go the commercial real estate route, IF you can get in, but again, I am not sure; just starting to research this.
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I received my "pre-boarding" paperwork from Keller-Williams last week and I received sticker-shock. As much as I would like to gloss over and sugar-coat everything, this is turning into a very expensive hobby. They want $100-120 the first month (added fees), then $85/month afterward and this does not include the $700/a year union dues to the real estate commission or my license fee of $200 and any 2-year renewal fees to the DOL (Keller-Williams provides required continuing education). In addition the agent suggested I pay for all the initial advertising, which includes making mailings and providing postage costs, for advertising in Church bulletins (which for religious reasons I am against, since it contradicts the 3rd Commandment "keep Holy the Sabbath Day" and people can say, well, just don't do TRANSACTIONS on Sunday, but I feel that advertising on a Sunday violates the Sabbath day of "keeping the Sabbath Holy; you have 6 days to work and 1 to rest…" etc). and that I would have to pay for that on TOP of all the initial up-front and renewal/union/recurring costs, and who knows if I would make one sale? For residential real estate, how large can the commission be? That is why I have tried to do the research on CRE. May God bless you, today, now and always. Clara
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Hi @Clara10169543. Thank you for sharing your insight. Choosing the right real estate brokerage to work with is a crucial decision that can significantly impact your career and success as a real estate agent/broker. Remember the right brokerage for one person may not be the best fit for another. Take your time to thoroughly research and consider your options to find the best brokerage that aligns with your career goals and values. We hope you find the right fit! Let us know where you land.
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Hello @Clara10169543 . I think you may have missed the REALTOR board dues (~$500/yr) for residential real estate in your fee analysis… That being said, there are start up costs in both residential and commercial real estate, and each brokerage has their own charges or benefits that should be weighed when determining who your broker partner is. I generally tell people to expect about $2000 of business start up costs to successfully launch your business (residential or commercial). I would say the most important thing for determining commercial vs residential is maybe not the start up costs but more what type of real estate you ultimately want to do?
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