Published by Kartik Subramaniam
In short, I’ve seen it all. I’ve seen people join the business during deep recessions and also in the best of markets. I’ve witnessed many people start out in different circumstances and have noticed three common reasons may fail to launch their careers once they leave our classes. This is true whether students take real estate classes in Los Angeles or otherwise.
Understanding these pitfalls can help you avoid them and ultimately succeed. My deepest wish is for you to be successful in your endeavors, and a large part of success is avoiding common mistakes.
I recently recorded a YouTube video onthree reasons I think some people fail in the real estate business if they’re not careful:
1. They Fail to Treat It Like a Business
When people get into our industry, they often don’t manage their time well. The flexible hours that real estate provides can shock a former 9-to-5 salary worker in terms of the level of freedom they suddenly have in their schedule.
The change in routine feels nice. It’s tempting to get lazy. Instead of jolting awake to the alarm clock at 5:30 am, they realize they can sleep in if they want to. This also means they can stay out a little later. This often starts a cycle of time mismanagement.
They’ll start to go to bed a little later and then sleep in. When they had a 9-to-5, they would hit the gym at 6 am, be out by 7 am and be in the office by 8:30. But in real estate, agents can wake up when they want because they don’t need to be in the office at any set time. Their new flex hours, which could potentially be an asset, are now a stumbling block.
On the other hand, those who treat real estate like a real job maintain structure. They show up at their office in the morning and are ready to work. They don’t leave whenever they feel like it or treat it like a part-time gig. If you want full-time success, you need to be prospecting like a full-time job. You also need to constantly improve on your know-how and build upon your expertise.
Think about this analogy: You have a restaurant that opens at 11. Do you show up right at 11? No! You arrive a couple of hours early to do kitchen prep so when the doors open at 11, you offer great food and service to your customers.
The same goes for real estate. You need to apply the same discipline to your time as you did when external forces were dictating when you showed up and worked.
2. They Fail to Remember It’s a Sales Job
Your real estate job comprises two basic components: lead cultivation and closing. A lot of people float along hoping to stumble into deals handed to them by friends and family. Sure, you can probably survive the first six to ten months with deals from friends and family, but what happens when you sell the houses of everyone you know? What if you don’t have a big sphere of influence? Are you actively prospecting? Do you use social media to reach out to new prospects? Are you actively promoting yourself online and with everyone you meet?
This is a sales job! A lot of people aren’t naturally comfortable with the idea of being a salesperson. As a salesperson, you need tenacity and passion. Reaching out to new prospects and leads may initially feel uncomfortable but eventually you’ll get more comfortable with selling. You need to constantly be looking for new leads even when you are busy, so that you never have a time when you’re not.
3. They Run Out of Money
When you start the business, you’ll need to pass your real estate exam and pay license fees and association of Realtor dues. These can all add up quickly, especially if you’re using your own money to market and promote your listings.
Because escrows are often lengthly, it’s important to understand that it takes time to close on properties. During this time you’re not getting paid, so the first six to ten months can be rocky financially. I see some people return to the 9-to-5 job because they run out of money — however, this whole situation can be avoided with some preparation.
Before you start making enough to go full time, it will take time to build up a pipeline in the first year. Have some savings set aside or a spouse to support you until you make enough to sustain yourself again. Overall, a financial safety net increases your chance of success during an agent’s first year.
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