Multiple Income Streams for Real Estate Agents and Brokers - Ray Abichandani

Multiple Income Streams for Real Estate Agents and Brokers (eBook)

A step-by Step Guide to Making Money in the Real Estate Market

Ray Abichandani (Autor)

eBook Download: EPUB

2021 | 1. Auflage
302 Seiten
Bookbaby (Verlag)
978-1-0983-7887-5 (ISBN)

The tools and techniques described in this book has helped not only me but some of my colleagues as well. It is my belief that this book will also help you increase your income and develop a profitable multi-income lifestyle. This way if one source of income dries up, you will have many other income sources to continue living a comfortable life. Many of the ideas described in this book are based on my personal experiences as a real estate Agent and a Broker. I would strongly suggest that you do not wait too long after reading this book to put some of the techniques into practice and start working towards predefined income goals. As we all know, only a few people practice what they hear or read. Those doers are the ones who succeed in their life and careers. I hope you are one of those few!

Multiple Income Streams for Real Estate Agents and Brokers is intended to provide multiple income sources to the real estate agents and brokers to supplement their income when the real estate market is cooling down or they would like to consider adding new marketing niches to their existing real estate practice. The tools and techniques described in this book leverages the current real estate knowledge and skills that these professions already possess or can acquire with limited additional education. Based on our market analysis , an additional six figure income per year can be built by using some of these additional sources of income. In this book, Ray Abichandani has presented over 50 new ideas and market niches to help real estate professionals to generate new buyer and seller leads, enter new market niches, and significantly increase their sales. Packed with rich insights and practical ideas, this book offers disruptive methods and techniques to revolutionize the traditional real estate market and challenges the existing mindset that the real estate professionals cannot generate income like their wall street counterparts. The time to start is NOW!

Chapter Two: Understanding the Real Estate Market

Understanding the Real Estate Market and Financial Planning Analogy

Every business type has their own vocabulary, knowledge base, and factors that impact that business. For example, Financial Planning or Advisory Services businesses have their own vocabulary such as FICO Score, net worth, capital gains, etc. A financial planner helps clients to establish their financial goals and, therefore, must be knowledgeable in finance, insurance, taxes, risk tolerance, investments etc. This knowledge is acquired by education such as a college degree, professional certification (Certified Financial Planner-CFP) and continuing education. The Financial Planner must also understand the forces that impact his/her business and the industry. Forces impacting the Financial Services business include but are not limited to: changing business model, technology, regulations, market differentiation, economic growth, political issues, etc.

Real estate market similarly has its own vocabulary, knowledge base, and factors that impact the real estate business. The real estate vocabulary has its own terms and definitions that a real estate professional must be familiar with, and since they are easily available, we will not discuss them here. The real estate knowledge base is important here because the success of business heavily depends on it.

It is sad to say that most of the real estate professionals are not that knowledgeable in their field. One of the major reasons is the requirements for obtaining a real estate license are almost very minimal. Anyone with a high school diploma can complete a 63-hour class and qualify to take a state test, pass the test, get a license, and start selling real estate. This is another reason why there are so many real estate agents in the USA including weekend, part-time, and full-time sales agents. One cannot be a Certified Public Accountant (CPA) without a college degree and a tough qualifying CPA test. However, as stated earlier, no degree is required to be a real estate agent or a broker! Less than fifty percent of real estate professionals have a college degree.

The real estate knowledge base is vast and varied, and the real estate knowledge separates the best agent from the average agent. For example, if a client needs a home with a boating dock, you need to know if there is a navigable canal, river, or ocean access on the property, and, if there is a fixed or open bridge from the river or canal to the ocean, what boat height is maximum to cross under the fixed bridge, etc.

The next house you may sell could be for an active military or a veteran, and you may need knowledge about VA loans. A real estate professional who is veteran-friendly must have knowledge about various aspects of home buying or selling for veterans. The real estate professional and the lender must know the VA loan process from the inside out. VA loan is impacted by the length of service, Certificate of Eligibility (COE), VA loan limits, credit scores, etc. Some sellers do not understand the loan approval process for the veterans and are sometimes reluctant to accept offers. A veteran-friendly real estate professional will be in a better position to explain the buying and loan process to sellers and alleviate their fears or reservations. For most home buyers if not all, purchasing a home is the single most expensive purchase in their lives, and, therefore, they must entrust this responsibility to a knowledgeable professional.

What Knowledge Base Do Real Estate Professionals Need and How Do They Acquire It?

Besides the basic education and the required post licensing education and continuing education etc., the real estate professionals need to acquire special knowledge to differentiate themselves from the other real estate agents. As of June 2020, there were two million active real estate licensees (source: Association of Real Estate License Law Officials/ARELLO) including 1,396,575 National Association of Realtor members (1). If that is not enough, about six million new and existing homes were sold in 2019, and with two million active real estate licensees, that is three homes available for every agent in the USA to compete for buyers and sellers!

So, what is the special knowledge or skillset that a real estate professional must acquire? It depends on many factors such as price range, buyer and seller profile, property type, location (city and state), market segmentation, etc. An agent cannot be everything to everyone. A different knowledge base is required to sell a home to a military person or a veteran than to a buyer looking for a home with a dock. Unfortunately, most of the agents take any listing they can get and work with any buyer they can find. I have seen websites of agents where they will show a listing of $150,000 home and a listing of $500,000 home. That clearly shows that the agent has no focus unless one of the listings is for a friend or a relative.

First, the agent should decide what real estate market segment he or she would like to serve. As stated earlier in this chapter, one cannot be everything to everyone because that requires a lot of knowledge and skill. It is suggested that the agents focus on only one of the following areas, develop expertise in that area, market themselves as experts in that area, and develop the brand. The medical field is a good example. Doctors are specialists in only one area such as urology, cardiology, or ophthalmology. We should learn from other professions and use those examples in the real estate business.

Some agents today try to represent buyers only, but unfortunately, they are not “pure buyer’s agents” because it is not possible to just represent buyers and not sellers and not accept any listings. One can focus on a strategy of dividing the business plan of sixty percent listings and forty percent buyer representation or any other desired proportion.

It is difficult to sell homes and find buyers as a generalist and make substantial money in commissions. Agents need to decide on their target market which includes four key elements: price, home category such as single-family home, condominium buyer or seller profile such as military/veterans or doctors, and lastly, lifestyle-desired such as ocean front, homes with a dock, etc. If you want to be successful, you need to specialize and focus on your target market and be an expert at it. This will allow you to focus your marketing on a selective target area and not go all over the board.

Here is a description of various marketing and other categories that an agent can select from:

1.Price range (For example, homes under $300,000 or homes over one million dollars).

Each price range requires different types of marketing and contacts. In 2019, most homes in the USA were sold in the price range of 200K-300K (thirty to thirty-five percent). The next range was from 300K-400K (twenty-five to thirty percent). Less than five percent of homes over one million were sold in 2019. However, these prices vary significantly by location. Average prices across the USA have no meaning at all. Agents must select a price range in their market. As we know prices in New York City, NY and San Francisco, CA are much higher than Milwaukee, WI or Palm Beach, FL.

2.Home Category

Agents must also select whether they would like to focus on a single family home, a condominium, a Co-Op, or land. In many cases, this selection also depends on location. For example, almost all homes sold in New York City are Co-Ops or condominiums. On the other hand, most of the homes sold in New Canaan, CT are single family homes. In these areas, an agent has limited choices.

3.Buyer and Seller Profile

Once price range and home type are selected, the next factor is to decide what kind of buyers and sellers an agent should focus on for marketing. Price range will include or exclude certain buyers and sellers. For example, if your price range is under $300K then, in most areas, high income earners will be most likely excluded. Price range and buyer/seller profile go hand in hand. An average price of a luxury home is over 1.5 million and, therefore, the buyer or seller profile will be quite different. The point here is that how and whom you market depends on the price range and location. Military/veteran buyers or sellers have different loan requirements and, therefore, a different prices range.

Here are some of the home buyer/seller profiles to select from:

a.First-time home buyers (about thirty to thirty-five percent of home buyers are first-time home buyers). First-time home buyers can be in various price ranges, but they have one thing in common. They need a lot more education and hand-holding in the buying process from initial offer to final closing and post-closing follow-up. Market focus on first-time home buyers is a financially and personally rewarding experience, but it requires a lot more patience, marketing, and particular knowledge in social media and digital marketing.

b.Specialize by professions such as medical, sports, entertainment, educational services, etc. Besides making money, you meet interesting people in sports and entertainment. For example, Celebrity Advisors, a Miami based Real Estate Company, provides full service real estate services (buying, selling, renting, investing) to sports and entertainment clients ranging from professional athletes to actors and actresses to film, television, and music executives.

One neglected area in real estate is services to small business owners. This is such a great...

Erscheint lt. Verlag	7.5.2021
Sprache	englisch
Themenwelt	Betriebswirtschaft / Management ► Spezielle Betriebswirtschaftslehre ► Immobilienwirtschaft
ISBN-10	1-0983-7887-3 / 1098378873
ISBN-13	978-1-0983-7887-5 / 9781098378875

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