So, I know two people who work in real estate brokerage–one guy is a 27-year-old commercial real estate broker who made $275,000 in 2007. My close close friend is a college dropout 24-year-old mortgage broker and is on track to pull in $300,000 this year and has made more than $100,000 every year since he was 19. This friend has asked me to join his group in about 6 months to focus exclusively on commercial mortgage brokerage. I know these are classic cases of survivorship bias, but what the heck?! Are the rest of us doing something wrong? My man just pulled in $20,000 on an equipment lease deal–took him 48 hours from first contact to signed documents! I’m only 23, but that’s like 40% of my annual income!
the sky is the limit. go for it.
still is pretty much a sales type job. There is always a skys-the-limit possibiity with a sales job, no matter what the industry. Just remember not everyone makes that kind of money as a broker. If you are in DC though, that’s the best real estate market in the US right now from what I can tell, so maybe all brokers do make that kind of money over there!
Is there really “The sky’s the limit” potential? $20,000 for 48 hours is $3.6M annually - fantastic, no doubt, but not my idea of extraordinary potential. When considering anything like this, think down the road to whether or not you can make a vast amount of money with equity in the business.
I don’t post much on here, but I just read this and anyone who takes the time to post that 3.6million isn’t extraordinary needs to be slapped. If you are currently making that, be amazingly thankful, not condescending, and if you aren’t then you are in no place to speak.
If $3.6M is your idea of “the sky” then you’re a small thinker and I pity you. I always make sure to ask an interview question along the lines of “What’s a lot of money to you” to make sure people can think big. I also have to question your reading ability, as the part about “fantastic” should give some level of insight into my thoughts about making $3.6M. Let’s just call $3.6M my P5, but I’d still like to know there’s a P1 out there.
I think you’re both right, to be completely honest. My friend–the one who invited me to join his firm–has a boss that was putting away $1 to 1.5 million in 2005. During the time of somewhat (ok totally fraudulent) lending standards in 2004 and 2005, there was a guy in the Washington, DC area who put away $50 million in 2005. Currently, he’s bankrupt. But Mary Mother of God! The money is ridiculous for people who are decent.
So what if some guy brought in 50 bucks one year! Like you said, he’s bankrupt now. There are a million of these ‘guys that made 50 million’… in real estate, finance, oil, porn… ANYTHING. It really depends on how hungry you are for that and what you are willing to do to get it. But let’s face it, the vast vast majority of these guys who made this kind of money in JOBS with nothing significant at risk probably did it illegally. Some of these guys kept their money, most (like your 50 mill wunderkind) don’t. The only legitimate stories of people who have made fortunes and held on to them are those risk taking entrepreneurs who had the guts, skill and stamina to try something that everyone else either thought was too dangerous or stupid to do and delivered real value to the world. On the topic of ‘limits’, however, I doubt that any of these entrepreneurs ever had any idea as to what the true value was that they were doing. They likely weren’t motivated solely by money, which is something you hardly ever see in the people in this industry. Besides, limits are highly subjective frames of reference. What’s a lot of money to some is nothing to others. Hell, there are plenty of stories of bums dying in the streets with millions in the bank. For them, money did not hold the same meaning as it might to you or me. I’m not usually one to sling accusations around on this forum, but anyone who thinks that someone can’t ‘think big’ because they might think $3.6 mil isn’t alot of money might be covering for some other insecurities. All I’m saying is that you might want to stop and think about what you’re saying before you open your mouth and stick your foot in it. At the end of the day, kkent, I don’t care if you do go in to real estate or stay where you are, you’re simply not going to find this kind of success without a real sense of purpose (whatever that might be to you). If you can’t answer to yourself why you get up in the morning and do what you do, than none of us can either.
Well, at this juncture my sense of purpose is to not work 55 hours per week for less than $50,000 per year. I’m not greedy by any stretch of the imagination, but my God–something has got to give. It’s not just finance, it’s accounting, real estate, consulting etc. We work ridiculously hard for very little in the grand scheme of things. It’s just frustrating to see that my good friend (who I am, in fact, happy for) is a college dropout and makes twice as much as my manager who is 29 and a superstar who puts in 60+ hours per week and has to commute an hour and fifteen minutes to work 'cause he can’t afford to raise a family close in. Just seems like the moral of the story is the same for every “parable”–whether it’s real estate or entrepreneurship–the primary way to make REAL money is to take a risky job, which is kind of what I was getting at in my original post (not really focused on the switching jobs–more like focused on what we as employees are doing “wrong”).
From a personal perspective, I can’t agree with you more. I’m in the same boat, as the vast majority of us are… i.e. just making a living. Sure, some might be making a few grand more than others, but in the grand scheme of things, we’re all in the same part of the wealth distribution curve. And at times, it really does suck, but than there are other times that you see the other side of the coin and it doesn’t seem so bad. Looking back over the past decade or so in my life and in the lives of my friends, I can say with some sense of confidence that you’ll start to see things level out for some of your friends. Some might continue to climb (and hopefully you’re in that boat) and some will inevitably fall. Personally, I started out in sales and had a good bit of luck at the beginning. Probably more than what I should have had. This then led me to believe that I was better at it that I was and that I enjoyed it more than I did. Thankfully, I learned my lesson early enough and hard enough to wake up from that dream and have had time to re-adjust my own personal path (and still doing it every day). At the same time, I had 2 friends, both in sales with me. Both are still in it, but only one is doing well (on the same level as your friend I would say). The other is really struggling and is at the point now that he can almost not turn back from his choice. I think, eventually he will be forced out of what he’s doing and find an alternative. Not because he’s not smart or isn’t motivated, but he just doesn’t have “it”. You’re young and have that same opportunity ahead of you so there’s really no harm in trying. You’ll know quite quickly (I would say in less than 6 months) if you’re going to be any good at sales. And if you are, you can expect to earn upwards of $200k in any given year and much more if you’re a true superstar. The best case is that you try and succeed. I also think that there is a lot you can gain from trying and failing, but that will depend on what you do with that failure. The worst case is that you try, fail and then never recognize the failure.
I’m surprised that no-one has spoken about the obvious fact that real estate was in the biggest bubble ever, and that bubble has popped, never to be the same for a very long, long time. There will always be sales and money in real estate, but the gravy train ended last year in residential, and is currently ending in commercial. The only short-term bounce I can see is if the Gov’t implements some massive bailout where homes/commercial properties may turnover a bit - but don’t bank on that.
I’m not disputing any of this, but I thought I’d take a moment to ask what the big difference is between residential and commercial real estate. I gather that commercial real estate leases have lower prepayment rates (because businesses tend to stay put longer than individuals) and probably have somewhat lower default rates, but is that it?
Historically, commercial lags residential from 12-14 months in terms of cycles. With commercial, the dynamics are a lot different as there is lots of analysis into population growth, forecasts, etc. to determine suitability and feasibility of projects. I’m not an expert, but know this from some developers and players in the business. Residential is a bit more cut and dry - especially a real estate brokerage, where all you’re basically doing is finding buyers and sellers, and hooking them up with a loan (which is a lot more work than it sounds).
Yes, I agree with you 100%, BosyBill. In fact, as my friend was telling me (I have no firsthand knowledge whatsover), a huge percent of mortgage brokers have folded in the last year or so. HOWEVER, the BEST ones, like my friend and his boss, have seen absolutely no let-up in work. They are expecting a far better year than even last year, which they did fantastic in. It’s good to be great.
darkhelmet Wrote: ------------------------------------------------------- > > Personally, I started out in sales and had a good > bit of luck at the beginning. Probably more than > what I should have had. This then led me to > believe that I was better at it that I was and > that I enjoyed it more than I did. Thankfully, I > learned my lesson early enough and hard enough to > wake up from that dream and have had time to > re-adjust my own personal path (and still doing it > every day). At the same time, I had 2 friends, > both in sales with me. Both are still in it, but > only one is doing well (on the same level as your > friend I would say). The other is really > struggling and is at the point now that he can > almost not turn back from his choice. I think, > eventually he will be forced out of what he’s > doing and find an alternative. Not because he’s > not smart or isn’t motivated, but he just doesn’t > have “it”. Substitute the word “sales” with the word “trading”, and that paragraph applies to my story.
Kken, i’m confused? Your friend is calling a mortgage broker “bad” because his funding dried up? That is the only reason they close the doors. There isn’t much to differentiate a bunch of bozos who give money to people & shuffle papers around… it’s not a “talent” business so you can’t say someone is bad at it. It’s about getting customers through the door and selling the loans off to other people based on fico, ltv, loan type, etc. There is no subjective input required from the actual mortgage broker.
kkent, what firm was your friend at? CBRE, Grubb & Ellis, C&C? Have you decided if you wanted to switch over to commercial real estate brokerage?
Just saw this thread…Definitely accurate assessment of salaries for RE brokers in some cases. I am good friends with one who works around NYC. Mid 40’s and he works four days a week and does a few hours of work from home on Friday’s. Makes a few million a year. He has a few young guys at the firm where he works- One has been making at least 100K a year since he graduated highschool at 18. Seems like a good deal if you have that kind of personality/ demeanor with people that allows you to be successful at it.
Think Fannie Mae/Freddie Mac or a very similar entity. And yeah, I’m still considering commercial sales brokerage, and I’m still working on a commercial financing project with this other guy mentioned in the original post. I was offered a junior commercial sales role with an estiablished residential shop that is entering into real estate development, property management, and commericial brokerage. I ended up turning that position down (man, I might regret this a lot) for the security and exit options of the other firm. Plus, its/our affordable housing team is number one in the world. Tough call. Classic risk/reward trade-off. I’m not looking to be a mega millionaire–I just want a family one day.
Any body can make lots of money in his industry. In finance, u can have guys raking in millions by executing trades or what not. I think the matter of the fact is that you have to be interested and good at what you do. You have to focus on your strengths. You can’t be jealous of what successful people do because you are not them. I might not have a slightlest clue on becoming a builder, but i think i do know more on finance/market than them and maybe one day i can use that as my advantage.