How I Made $20K In One Month as a Realtor (On the Side)

 in Blog

A few years back I decided I wanted to invest in rental properties. 

I quickly realized that the best properties were scooped up before I could get my realtor to schedule a time and open the door. 

So, I decided to get my license. 

It would be a win-win for me. I make a little commission to put into fixing up the property and I am able to look at houses freely. 

I studied for a month, took the test, passed, and found a brokerage to hang my license under. 

The 100K Club 

Shortly after joining, my brokerage sent me an email about a free training they provided to all agents. They called it The 100k club. 

I had no interest in being a realtor. I was the finance guy who was just looking for an easy way to buy rental property. 

But I’m a sucker for catchy titles, and I watched the first video to see what it was all about. 

It took me about 10 minutes to realize the strategy they teach their agents is genius. 

In sales, you are dead if they don’t have leads. This was a way to get a whole page of leads in a day. 

The best part? It doesn’t cost them a dime. Just a little hustle. And it can be replicated anywhere, at any time. 

There were agents in the brokerage swearing by the strategy. 

I decided to try it. It worked. In fact, I made 20k last month selling real estate on the side. 

I work a full time 9-5, have a family, run websites, and have a podcast. This strategy got me started and allowed me a 20k month (on the side) without having to invest loads of time. 

Here’s how it works. 

How I Found Leads for Free

Leads are the lifeblood of the real estate industry. 

If you don’t have leads you are dead. So how can you find leads and work a full time job? 

Well, I found leads while working a full time job, running multiple websites, and managing another real estate investment business.

The key is finding the highest value activity for your time.

The strategy I use to find leads is not for the faint hearted. 

I made the leads come to me. The beautiful thing about this strategy is it takes actual work, which most people do not want to do. 

You can put in a few hours a week doing this one simple activity on nights and weekends and be 10 steps ahead of Realtors who just sit at home who did nothing all day but perfect their team logo.

So what did I do? 

I ran open houses. Not just any open house. The secret is to have bank owned open houses.

You mean the houses that are trashed and need renovation? 

That is exactly what I mean.

Why This Strategy Works 

When you have an open house, you are meeting new people. Guess what most of those people are in the market to do? 

Buy a house. 

As a realtor, you want to find people who want to buy a house. Many agents will pay thousands a month to Zillow for the same amount of people (leads) that you can meet on a weekend at an open house. 

If someone owns an ice cream truck. They want to go exactly where their customer base is, kids! 

That is why ice cream trucks play loud obnoxious music by playgrounds or through neighborhoods known to cater to families. Their customer is there. 

If you are not meeting people or potential clients, then you will never generate new business. That is your job. Meeting people and creating value for their specific needs and wants. 

You need to go where your customers are. Where your customers are is open houses! 

Many times, people walking through open houses are just starting to look. They do not yet have an agent. That is where you can shine by showing them all the great features and explain anything that they would need to fix in the house. 

You instantly are showing that you can be valuable as their advisor. It is the perfect stage to show your skills. 

Email Listing Agents 

The beautiful thing about this strategy, is that it is not location dependent. You can repeat this in any town, any county, or any state. There will always be houses for sale that have listing agents too busy, or too lazy to sit their own open houses. 

To get started sitting in open houses, you need to find a listing agent who will let you host their listing. Most likely, you will not yet have listings yourself (more on this later). 

To do this, log-in to your local MLS (multiple listing service) and search for bank owned foreclosures in your area. Get a list of 10-20 of them if you can. Target the newest listings and price drops first. They will have the most buzz. 

Then find the agents contact and email them. Most agents only care about themselves, so you want to make this a win-win proposal. 

The Pitch to Listing Agents 

Bank owned open house agents have to do a number of “tasks” that other listing agents may not have to do. An example of this would be taking pictures of the property. If someone wants to hold an open house for free and handle those tasks, it is a no brainer for a listing agent. 

Here is my exact pitch that allowed me to land open houses at a 20% rate. 

Good Afternoon (Agent Name),

I hope you are doing well. I saw you have a bank owned listing at (property address). I am looking to generate business and meet potential clients so I was wondering if we could create a “win-win” scenario for both of us. I know many people that have sat open houses at bank owned properties and I do know that your asset manager probably mandates certain tasks that you are required to perform each week. 

I would love to do an open house at this listing and would be happy to perform a “check” of the home, take photos, show evidence with a picture that I did an open house (in order for you to show your asset manager). I have learned that these open houses are a great way to meet clients, and also a way I can potentially help you.

I will follow up with a phone call and a text as well. My contact info is below. 

I look forward to seeing how we may be able to help each other meet our goals.

Dealing With Agent Responses

There is an old saying that Realtors are nice to everyone but other Realtors. That is definitely true in my experience. 

You may get rejected. Don’t get defensive or snarky. You may have to sit at the negotiation table later with that same agent. Do not burn any bridges. 

You may hear crickets. Follow up a few times. If you still receive no response then move on. There are so many open house opportunities that you do not want to waste time trying to grab the perfect property to sit. 

Eventually agents will respond that they would be happy to allow you to sit their listing. Schedule a time with the agent and ask if there’s anything they need done. 

I can not tell you how many job offers I have received from other agents because of the way I handled their tasks they needed completed. They are doing you a solid by letting you hold an open house, make sure you return the favor by saving them time and energy. 

How Long Should My Open House Be? 

You want to make sure this is something you will stick with. It needs to be sustainable. If you are a full time agent, I would literally sit open houses 9-5. If you are doing it on the side, start with 2 hours on saturday and 2 hours on sunday. 

Remember, every open house is an opportunity to meet a buyer. I will show you how to utilize down time at open houses later in this post. 

Open House Signs 

The next thing you will need is open house signs. Resist the temptation to run over you Home Depot and get regular open house signs. You want to get signs that say ‘Bank Owned Foreclosure Open House’. They should also have a direction arrow. Here is what I made on Vistaprint. Feel free to copy them!

Trust me, these signs draw people in. 

I made sure to get at least 10 signs. Most of the signs I throw along the closest busy road. Then have signs directed through the neighborhood to the house. 

Typically, I will set them up the night before to create some buzz. If you set up signs the night before, some may get stolen or damaged. It is all part of the game. 

Sign-In Sheets and House Information Sheets

Before you start, you want to print off a sign in sheet and information sheet. The sign in sheet is your bread and butter. This is where your leads will put their contact information and email address. 

The house information sheets can be pulled from the MLS. Most multiple listing services will allow you to add your contact information on top of this sheet, even if it is not your listing. Make sure you do that so guests can find your contact easy. 

Lastly, print off some as-is contracts. You will one day use them. 

The Open House 

If you implement this strategy, know going in that 50% of foreclosures are nasty. 

They may not have AC/Heat, they smell bad, and are usually a mess. 

But, they are loaded with opportunity. You will have home buyers and investors walking through the door. 

I am not a salesy (a word I just made up) guy. I hate being sold to. So here is what I do:  

Greet everyone with a smile, hand them an information sheet, and ask if they will sign in. Some people do not want to sign in. Don’t force them. 

Ask a few questions about what they are looking for then let them walk through. People hate to be oversold. You are just there to bring value and be a resource.

As they leave, ask if they have any questions. Thank them for coming, hand them a card, and let them know of the services you offer. 

Now, I just said I don’t like being sold. But, to close any lead you have to ask for their business. IF you don’t, you will just be holding open houses for strangers without making a dime. 

Most people won’t use you. You know that going in. All you need is one person to have interest in your services. 

Two Types Of Buyers 

There are two types of buyers and you have to treat them differently. 

Investors

Investors are drawn to bank-owned open houses. Many know there is an opportunity at the right price.

 They want to know the numbers. Get familiar with real estate investing terms. Many want to know the cap rate, rental rates, after-repair value, and potential cash flow metrics. 

If that sounded like I was speaking another language, try to learn real estate investor metrics during your open house downtime. I would even prepare simple spreadsheets for investors. 

They are some of the best clients you can have. Why do you ask? Because they do not just buy one property. Many will be your repeat clients over and over if you can speak their language.

Most agents wont do the simple work to learn these metrics. This will help you stand out. 

Home Buyers 

The other buyers are folks who are looking for their primary residence. They could care less about the numbers. They want to know about the features and how they could transform this place into their dream house. 

Think about how you would transform spaces with lighting, open concepts, and beautiful finishes. Then explain that to them if the opportunity arises. 

What if my Open House is Slow? 

Your open house may have zero people show up. This can happen if the listing has been sitting for a long time.  

If your open house is slow, don’t leave. Stay until the end. I have had open houses on multiple occasions where nobody has shown up. I wanted to quit and leave. For some reason, I stuck it out. 

On many occasions, one person has shown up the last 30 minutes and bought the house. If I would have left early, I would have missed out on $20,000+. 

Make it a rule that you will stay the entire time. If you leave and someone shows up, they will not be happy. They may call the listing agent and your reputation is ruined with that agent. 

Down Time During the Open House 

Running an open house is the same as working at a retail store. Everyone comes in waves. There will be lots of downtime. In a three hour open house, you can have two total hours to yourself. 

I was determined not to twiddle my thumbs or scroll IG, so I decided to make it extremely productive. 

I bought a cheap folding table and single folding chair on Amazon. Then tethered my phone’s internet to my laptop. 

Instantly, I turned my open house into a mobile office. This allows zero time wasted. You can run your entire real estate business from these open houses, then go home and be with your family. 

This is the time to make phone calls from other open house sign-in sheets, email potential leads, or set-up other open houses. 

I run a few websites, have a podcast, and have a full time 9-5. So if I ran out of things to do on my real estate business, I could write articles, outlines, or catch up on projects in my day job. My productivity goes through the roof. 

After the Open House 

After the open house, make sure to clean and lock up. Turn off all the lights etc. Give the listing agent a report via email and send all the pictures you took (if needed). 

Calling Your Sign-In Sheet 

Cold calling sucks. It is that simple. As time goes on, you will get better at it. The problem is, you have to do it. It is why you are having an open house, to generate those leads. Zillow would charge hundreds of dollars for the same handful of leads. 

You have to contact your sign in sheet the day after the open house. If they don’t answer, send them an email thanking them for coming. Then add them to a master list to follow up with. 

Studies have shown that it takes 7-14 calls before a buyer will use an agent. Rejection is inevitable, but the consistent will always win. 

If you are comfortable on camera, another method that works really well is to send them a quick video thanking them for coming and asking to call you with any real estate needs they have. 

This surprisingly has a higher success rate than cold calling. They put a face to the name and have a more personal touch. You can do this around holidays as well. 

It is All in the Listings 

Listings are where the big money is made in real estate. You leverage your time and efforts, and can receive double the commission. 

When you start getting active by holding open houses. Things will open up for you and your business. 

I have had the neighbor of the open house come over and ask me to list their house. Once you get your first few listings this way, they seem to roll in. You are working smarter, not harder to get these clients.    

Then you get buyers off your listing. People call your signs, and if the property is not for them ask things like “Well, do you know of any properties that fit  X criteria?” 

Then your business is rolling. Having a mixture of listings and buyers is how I made 30K in one month on the side selling real estate. I helped buyers and sellers with 4 properties of it would have happened if it were not for getting started with Bank Owned Open Houses. 

How Much Does it Cost to be a Real Estate Agent? 

Unlike my online side-businesses, holding a real estate license has higher costs. 

Brokerage 

My suggestion if you want to do this part time is to find a brokerage whose business model is low cost to agents (but they usually have a higher volume of agents). 

Here’s why. 

My brokerage only charges me $120 per quarter. If I help a client buy or sell a house, they charge me a $250 transaction fee. I am capped at $4,000 a year. 

Most major brokerages will charge agents a few hundred dollars a month and take half their commission for each transaction. This leaves the agent having to sell double the houses for the same profit. 

Yes they may provide leads (my brokerage does not which is why it is so cheap), but many of the leads do not amount to a sale. Major brokerages will also make you do certain tasks like check on other agents listings, have open houses, take pictures etc. No wonder most agents won’t make it past two years. 

That won’t work with this strategy. 

Every state has brokerages like mine. You just have to google your state and low-cost brokerage. 

$480 +  $250 per transaction. Max would be $4,000 / year

MLS Fees 

Multiple listing service fees are the next requirement for any realtor. 

The MLS is how listings get on sites like Zillow. Realtor.com, or Trulia. It is the way you get access to view properties and how you post listings. 

$400/year 

Realtor Fees

Every agent who is part of a brokerage must become a part of the National Association of Realtors. Your brokerage will direct you to the local branch. 

$600/year 

How Much Commission Do You Make Buying or Selling a House?

If you are helping someone buy a house commissions range from 2.5% – 3%. This depends on the agreement between the listing agent and the seller. 

So if you helped an investor buy a foreclosure for $200,000, at a 3% commission, you would make $6,000. 

Remember earlier when we talked about how it’s all about the listings? Here’s why. Listing agents can list a house, get a phone call that someone wants to buy the house, and get the listing and buyers commission. Listing agents have the potential to make 5%-6%. 

For that same $200,000 foreclosure, if a listing agent handled the buyer and seller, they would make $12,000 in commission. 

You can see how meeting people at these open houses can really snowball into a huge side income. 

If you landed one buyer a month. With an average sale price of $200,000, you would make $72,000 a year on the side. 

1.5 a month and you are making over $100,000 a year, on the side. 

There is no cap to how much you can make, only how many people you meet.

andrew
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