Do Real Estate Brokers Really Die Broke?
It is often unfairly quoted that real estate brokers die broke. While inaccurate, it is surprising to see firsthand how few ever acquire any meaningful amount of investment property over their career.
In a recent survey of commercial brokers, less than 15% of respondents indicated owning real estate beyond their single family home. This is a staggering statistic when you consider the market savvy and industry knowledge they possess.
As recognized experts in real estate, one would expect brokers to place a premium on the importance of stabilized income generation.
The art of wealth creation goes well beyond earning commissions. There is also no one size fits all strategy that works for everyone. However, provided are a series of simple steps designed to assist anyone (real estate broker or other) who desires to start acquiring investment property:
- Establish Goals. Proactively document your short and long term goals. It’s much easier to hit a defined target. Develop a realistic focus and work your way up. Don’t expect to own a hundred thousand, let alone a million square feet overnight.
- Build a Savings (Down Payment). Depending upon your timeline, an easy place to start is setting aside 10% of your commissions in a separate account. When you close that big deal, challenge yourself to contribute more to your future.
- Identify Partnerships. Seek out key partners to help you get started. These relationships may be other colleagues in your office. In addition, many investors are receptive to the broker participating in a transaction.
- Culture. Make sure you are surrounding yourself with like-minded people who are encouraging professional growth and that investment is a critical part of this process.
- Buy Right. Don’t ever underestimate the importance of due diligence and buying not only the right property but at the most competitive pricing possible.
- Sacrifice. Be prepared to make sacrifices early on. Unless you have a wealthy Aunt prepared to leave you a substantial inheritance, the great things in life take time, hard work and dedication.
The truth of course is that brokers don’t die broke. The other sobering fact is that those who choose to live commission check to commission check will eventually be faced with a very tough reality – variable or declining income, a lack of appreciating assets and no plan for retirement.
Sometimes the simplest plans can create lasting results. Income producing real estate provides consistent, predictable income streams to plan your future around.
Do you have a plan in place that has delivered proven results? Be a mentor and please share your success story with the next generation of real estate professionals…above all, encourage them to invest!