I had big goals for 2018, and so far it is starting out with a bang. I bought a 68,000-square-foot commercial property a couple of weeks ago. I wanted to buy a 50,000-square-foot or larger building this year, and along with that goal, I wanted to start my own real estate brokerage. Now that I have the building, I have already started to remodel the space I am going to move into. I wanted to start my own brokerage for a while, but I have had a lot of things going on, and I wanted to be able to rent space from myself. On this podcast, I will go over why I want to start a brokerage and some of the things I have to do to make it all work.
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Why I did not start a real estate brokerage sooner
I have been a licensed real estate agent for over 15 years. I have worked for the same company and broker my entire career. My dad helped start the company in 1992 but sold his shares before I started working with him. My dad and I worked together for over 10 years before I bought him out in 2013. I have been running my own team at this office for a few years, which is like running a brokerage. When I was most active as a real estate agent, I was selling bank foreclosures and HUD homes. I sold over 200 houses per year when things were really busy. When you are an REO agent, you have to solicit banks and the government to get listings. It is not easy to get those accounts, and technically the accounts are with the broker and not the agent. I was the point of contact for my REO accounts, but if I ever left the office, I would have to reapply with every company and hope they approved my new office. There was no guarantee that my accounts would move over with my new office.
In the last few years, I have focused more and more on the investing side of the business and not the agent side. I still have a team of agents, but I rarely sell anything myself. I sold one REO last year! I like the investing side much more than the agent side, and I do not plan to be an REO agent again, even if foreclosures come back in full force.
Why do I want to start my own real estate brokerage?
In my current situation, I pay my broker for three offices plus a flat fee every month. The flat fee allows me to keep 100% of my commissions and add as many people to my team as I want. It is a pretty nice setup, but I still have to pay quite a bit to run my team. We are also in a very tough house-selling market because there are so few houses for sale. There are only 82 houses for sale in our entire town of 100,000 people. If I started my own office, I would save a ton of money because:
- I would not have to pay my broker the flat fee anymore.
- I would have my own space that I am renting from myself and my partner in the deal.
- I would have complete control of who I hire and who I work with.
- I would be able to design and build a cool work space.
- I would not have to worry about an office I was not in charge of changing without my control.
Even if I was not paying rent to myself, I would be saving money paying for my own office space over paying my broker. I already pay for staff to help the agents on my team and myself, so there would not be many more expenses running my own office either. I can also charge other agents desk fees to be in my office instead of paying my broker desk fees for me to be in his office.
What do I need to do in order to start a real estate office?
Starting my own office won’t be easy. I have a lot going on already with 18 active flips, having bought the large building, and this blog. However, I am a big fan of hiring people to help me get more done. In fact, we are looking to hire more people for our team. We are looking for more agents, and more administrative help. If you are in the Northern Colorado, area and interested, please email me at [email protected].
With today’s technology it is not too hard to set up your own office, but I will need:
- A broker manual.
- Additional insurance.
- Set up with the local MLS.
- A showing service.
- A nice office to put people in.
We are already working on the office, and I have a goal to be completely set up and running by June 1st.