If you enjoy selling real estate, then you already understand the types of profits you can make. Yet, it can be difficult to split your profits with several agents.
It can be such a disappointment when you hear you are receiving a $300,000 commission but splitting it with five other agents. Now, you are still getting a nice payment, but only a fifth of the full amount. Plus, you have to deal with the personalities of four other agents who probably think they know the best way to sell the house. It can be chaotic.
This is why successful real estate investors choose to own their own brokerage to help structure real estate investments in the best way they see fit.
Start with Saving
You will need money to open and run a business. Items to consider include:
- Renting or buying a space
- Website design
- Logo design
- Office signs
Then, you need enough money set aside to cover operating costs. If you want your business to succeed, you need to keep the lights on and the Internet working. You also need your phones to work.
Moreover, if you plan on hiring anyone, you need to have enough one hand to pay their salaries for several months until the sales start coming in.
You want to ensure your business is a business. This all depends on what type of tax status you need. In general, many real estate brokerages are set up as LLCs. This means owners can legally separate themselves from liability and increase protection over personal property and finances if ever faced with a lawsuit.
It’s not difficult to create an LLC.
All you need to do is file articles of incorporation with state agencies and ensure your company maintains good standing. Nonetheless, it helps to seek out the advice of an attorney who specializes in real estate issues.
You may also want to discuss your plans with a financial advisor to ensure you are spending your money wisely.
You also must decide how you will get leads. You need a plan that will keep your inbox filled and your phone ringing. If you don’t have leads, your business will dissipate rather quickly. So, you must have a marketing plan and a marketing budget.
Even if it’s a few reams of flyers, you must start advertising. Some strategies work better than others. The point is: you need to make money to stay in business.
Now that you have a real estate business, you need to hire agents to bring in multiple streams of income. Who you hire depends on what type of business you can attract. The best agents will work for firms with the potential for many good leads. So, it is your job to provide that. Easier said than done, but it is necessary for getting the best agents available.
Starting a real estate brokerage is a good idea for seasoned agents with a plan for success. Huge profits won’t come in overnight, but they will happen with the right strategy and implementation.