Rain City Guide

1. Pingback from FBS Blog » Blog Archive » We Have A Secret
Time April 25, 2007 at 10:52 pm

[...] Real estate brokers and agents face this issue all the time.  They build a business for years around their personal brand and then they have to figure out an exit strategy.  Hopefully the broker finds a larger company interested in buying them, but that’s not always the case.  Wouldn’t it be cool if an ESOP worked for real estate, too?  ESOPs might seem weird for real estate, give the commission models of compensation and the independent contractor status of so many agents.  On the other hand, Ebby Halliday has created an ESOP (though I don’t know if or how agents are included as it isn’t mentioned on their web site) and Keller Williams and RE/Max have some interesting models that touch on shared ownership.  Also, agents certainly are entrepreneurial; they have an ownership mentality.  Perhaps an ESOP real estate firm is possible?  Maybe broad-based ownership focused on the long-term is just what the industry needs? [...]

2. Comment from Ken McCormick
Time April 26, 2007 at 6:19 am

I like real estate for all of the reasons mentioned above. It gives me freedom to do as I please. I use the internet as a tool with 5 web sites to market my services. Marketing is what Real Estate agents do if they want to be successful.Like any other business you have to let people know who you are, what you do, where you do it and why they should choose you. I am Ken McCormick in Orlando, Florida. I’m a Realtor and a Mortgage Consultant. I know the ins and outs and dos and don’ts of Real Estate and Mortgage transactions and can identify potential problems. I eliminate them before they effect my customers.That’s why you should choose me to save you time and money.

3. Comment from David Losh
Time April 26, 2007 at 7:49 am

Thank you for this post!
I started in the Real Estate business in 1968 at fifteen years old kicking and screaming. My brother came home one summer day to drag me out of the house to paint some garages in a building on Magnolia. Painting is a big part of the Real Estate business.
Over the course of some years as the painter for a Real Estate company things began to fall into place. Selling in those days involved big hair, cigarette smoking, Cadilacs, and plaid jackets. That wasn’t for me.
One of the agents became my best client who showed me the other side of the business. She could buy a house on Monday, have it back on the market by Friday and make a profit. Those were the days. By the end of the 1970s people were giving houses away if you would make the payments. That continued until the late 1980s.
These were the bad old days the Board of Realtors would like to forget. These were days of easy money for any one who could float multiple properties by manipulating rents to generate cash flow. Many low life loser scum slum lords of those days are Real Estate moguls today. It didn’t require anything more than a high school education to be worth millions of dollars and it still doesn’t.
When I was in college I was playing chess with my economics professor who was interested in my business. He had asked in class what each of us did. I owned a painting company and partnered in Real Estate. Bottom line is he wanted to know how the Real Estate business worked because I made more money than he did.
My first mentors and there were many told me “we are not in the Real Estate business to sell Real Estate, we’re in the business to buy it.” That’s the business. Make no mistakes about it. Owning and controlling Real Estate is the only basis of wealth in the world. All of the intellectual properties in the world don’t add up to the Real Estate holdings of Paul Allen.
People ask me all the time “if you know so much about it why do you keep working?” It’s the same question I ask many of my contemporaries. The answer I hear the most is that we love the business. We care about people and want to share what we know. My new thing is that I ship money out of the country to South America. I work in an office in the International District for an Owner/Broker who is from Viet Nam. He has the responsibilty of generating working capital for his family.
For all of the bad stuff you hear, or all of the nickle and dime swindles there are in the Real Estate business, the people who survive and thrive are the good ones.

4. Comment from ARDELL
Time April 26, 2007 at 8:24 am

1.) Right after I had my third child, I had a tumor in my thyroid. Having worked every day for 16 years, I was bored being home on sick leave waiting for the operation, so I went to real estate school. With a 4 year old, a 2 year old and a 6 month old, it was getting harder to be at work for specified hours every day. I wanted more time for my three small children. I switched from being an Investment Officer at that time, which required me to keep stockbroker hours, to real estate. I’ve never regretted it. Flexible enough for a Mom of 3 and still a rewarding career. I actually worked 60 hours a week vs. 37 1/2, but the flexibility gave me more time with the kids. I often went to work again after they went to bed, so my work hours interfered less, with my quality time with my children. Many mentors, too many to name. We are never without mentors, as the learning process never ends.

2) Why real estate? Like many people, because I was frustrated with the agent who was supposed to be selling my house, when I had the tumor and thought I had six months to live. When I lived, I decided I could do it better than her…and I was correct!

3) I sold my house and bought a smaller one,so we could live on one income, which I would have done anyway since I thought I was going to croak maybe. I was on sick leave and being paid by the Bank initially, so I had time to learn my craft with zero income from real estate. I had 19.6 years at the bank and 2 years of built up paid sick leave to start me off, which is why I made the move while I was sick. I started in June of 90 in NJ. Switched to PA in 91 and had my #1 Agent plague by 93. Not much of a learning curve for me.

6) The big eye opener was when we started our own Company back in 04. My insights about shifting from agent to owner could fill a book.  As you know Robbie, I’m thinking of doing a spin off Company with Kim as Owner/Broker of Sound (as he is now) and me as Owner/Broker of the spinoff. Mainly because my standards are just too high regarding…well just about everything…

5. Comment from ARDELL
Time April 26, 2007 at 8:47 am

Fabulous story, David. Thanks for sharing. None of my mentors talked about owning real estate vs. helping others buy and sell it. In fact I was taught it was a conflict of interest to do anything but help others buy and sell real estate. When I saw agents grabbing the best values for themselves, I thought it was godawful Some times high ethical standards can get in the way for me. My bar has always been way too high.

6. Comment from JD Blackwell
Time April 26, 2007 at 9:48 am

The only reason RE wasn’t my first choice is because I got sucked into the educational paradigm of “Go to school, get good grades and get a good *job*”. I was an engineer; loved the work, hated the corporate BS. A broker friend of the family had asked me when I was going to get a license and “do” real estate every time she saw me for over five years. It wasn’t until I had mentioned these conversations to other non-RE friends who nearly all reacted that they thought I’d be really good at it that I finally gave it some serious thought. Learning to be self employed is not the easiest thing I ever undertook. I wish that my education would have included a healthy dose Kiyosaki’s consciousness back when I was in grade school. Somehow the MBA program I went through didn’t even impart that mindset very effectively.

While I wish I had started RE decades ago, I also know that many of the skills that make me good at this came from the education and experiences in my past. The problem solving and project management aspects of engineering make getting through a RE transaction a piece of cake. How tough can negotiating a PSA be after doing a union contract? The very early years I spent as a pro photographer even put me a little ahead of the curve when I take a listing.

I jumped into RE estate with both feet full time for a couple of reasons. Most compelling is that the company I started with didn’t allow part-time agents. I, personally, felt from the beginning that I wouldn’t hire a part-time agent to list my home so I couldn’t in good conscience subject my future clients to a lower standard than I’d accept. If there’s anything I have a gripe about, it’s that it’s so easy to get a license that far too many of us are hack part-time hobby agents. FOr the sake of our own credibility as a group, I believe we need to set the bar much higher.

I never expected to get filthy rich doing RE but as you mentioned I love the part I play in helping folks attain a home. Done right, it’s clean, honest work to be proud of and like Ardell, I have pretty high standards. I’ve considered opening my own brokerage which because of those standards would be small and independent. One of the frustrations for me is the inordinate amount of self marketing it takes to get the RE business that pays for the marketing. I’m not good at it yet. In my perfect world, fewer, more qualified agents would spend more time on being RE professionals and a lot less time marketing.

7. Comment from Robbie
Time April 26, 2007 at 11:44 am

David Losh,

Keep in mind, it was an ownership interest in a company that primarily develops intellectual property (Microsoft) that paid for the real estate holdings of Paul Allen. Owning and controlling real estate is not the only basis of wealth in the world. It might be the best basis however.

8. Comment from W. Keoki McCarthy
Time April 26, 2007 at 12:48 pm

1. How did you get involved in real estate?

I graduated from college and didn’t know what I wanted to do so I moved to Japan to teach English. While there I researched jobs and tried to figure out what I was interested in. Real estate kept moving to the front it fascinated me. So, I came back got a job in sales and enrolled in a real estate school. I figured I should learn a little about sales so I spent about a year working for a medical sales company. When I passed the licensing exam I immediately created a flyer about myself and why I would make a great real estate assistant. It never dawned on me to try and jump right into being an agent. I sent it to a bunch of agents that were looking for assistants. Michelle Jewel and Patricia Love were agents with Coldwell Banker Bain in Bellevue. They agreed to meet with me. I went in to the interview with as much confidence as I could and really tried to sell myself I wanted the job so bad I could taste it. They hired somebody else.
However, they did something even better. They told their broker Lew Mason (now with Windermere) that they thought I should be an agent. I had very little money so the idea of selling real estate for 100% commission seemed crazy to me. I met with Lew and we sat down for about an hour and he explained how being an agent worked, and he was very confident that I could make money. Lew is a laid back smooth talking guy and had me convinced. More importantly, He stepped out on a limb and gave me a little monthly cash that I could pay back when I started making a commission. I was young had no debt and little bills so I went for it.

2. Why did you get involved?

I have always liked innovating and being able to do things creatively. Real Estate can be a great conduit for that. It truly is a career that let’s you drive the direction you want. I am not very good at doing the same thing over and over again. I also, constantly look for ways to do things better. Those can be problematic if you have a boss that wants things done their way. That might also be why I decided to open a brokerage as well. I loved Coldwell Banker Bain. The agents were great I loved my brokers and the owner, Bill Riss is an extremely intelligent guy that I respect immensely. I learned a lot there. I just thought I might be able to improve technologically if I could create the systems myself.

3. How long did it take you to “make it”?

I don’t know if you ever know if you’ve made it. I’ve been doing this for over ten years and I still count how many days from bankruptcy I am. As an agent on the good days you earn your commissions, you have some clients, things are great. But, what if one day you have no clients? I would start to think, ok, if all of my clients don’t buy and no one calls me I can last about 60 more days without a sale and then I’m going to have to call 1.800.bankrupt. This feeling has dogged me through my years as an agent and now, I just added another layer, owning a brokerage. I have some great agents working with me but I still have lingering thoughts like, if the agents all leave tomorrow, I am 90 days away from bankruptcy. My wife teases me about this. But, I just can’t ever shake the feeling that everything I have worked for could just end by some mistake or bad market or some other unforeseen event, anytime. On the flip side, that fear is also a great motivator; it keeps me from getting too lax about working. Sometimes we can get on autopilot and just work in our business and forget that you have to keep building your business. I am a strong believer in the saying that if you are not growing you are dying.

4. Knowing what you know now, what would’ve done differently when you started out?

Boy where do I start. I think there are so many things that I would have done differently, but most are based on knowing how good our market has been. I should have bought up all of Clyde Hill and Medina, bought a heck of a lot more Microsoft and Amazon stock, etc. As for how I got into the business and the hard work I put in to get to where I am today, I feel like I’ve made most of the right decisions. I love working in real estate, I really enjoy helping the agents in my office grow and learn. I wouldn’t want to change that.

5. Any other insights you’ve gained on the road to being your own CEO?

I am still early in my journey. I expect that I will be doing this for a couple more decades. I have learned that being your own boss is awesome and terrifying all at the same time. There is nothing better than getting a call from a friend saying lets go golf on Tuesday morning because the sun is out and being able to say I’m on my way or, sleeping in one day without making a phone call pretending to be sick. On the other hand, I sometimes lay up at night wondering where things are going and will I be able to stay on top of it all and keep my business growing so I can feed my family. Well, With what turns out to be a lot more writing than I had planned, I would give you this advice. GO FOR IT! I am one of the luckiest people I know. I have a great job, a great family and a great life.

9. Comment from ARDELL
Time April 26, 2007 at 2:20 pm

JD,

If I could Blog to my heart’s content AND be totally free to negotiate commissions without having my own Company, I’d do that. I’m waivering right now with starting a spin off or hanging my license with someone who MIGHT let me do what I do.

If you want to talk about it sometime I can give you some insights, pros and cons, based on our experience. Phone or coffee…either works for me.

10. Comment from Jim Frey
Time May 1, 2007 at 2:05 pm

Robbie: Where do I begin…..20 years in the Hospitality field led me to a Real Estate career…..I am entering my 7 month & I couldn’t be happier. Income is a different story…..Closed 2 deals so far. 2 more in the hopper. I’ve got great mentors/coaches @ Windermere…..Plus I get to have lunch with my wife DAILY! Now, tell me where the time goes…..LOL!