By Jef Conn
We’ve all been there—we close a deal and then realize it’s going to be a long time before our next deal closes because we don’t have anything else in the pipeline. That stress is something all agents have faced at some time in the career. Real estate is a tough job, but making the right money moves will help you sustain this business long term.
I’m writing this as a full-time agent. I’ve never done real estate part-time nor have I had a second job during my career. That said, I understand many people have other jobs that can help sustain them until their next closing. My personal opinion is to save as much money as you can to transition into real estate full time if you want to reach your full potential (and make the most money doing it).
Here are five tips to help you make ends meet between closings:
- Put money into savings. Every time you get a commission check, pay yourself first. Put 10% to 20% (or more) into a savings account and don’t touch it unless the repo man is coming to get your car or house.
- Build your pipeline. The key to financial success in this business is building a pipeline of continuous deals that are closing on a regular basis. This helps ensure consistent cashflow, which makes a world of difference in allowing you to put more money into savings and have some freedom in how you spend your money.
- Never stop prospecting. The more you prospect, such as making phone calls, knocking on doors, and calling on expired listings, the more business you’ll have. It’s that simple. Real estate is a numbers business. As you get better at prospecting with experience, your ROP (return on prospecting) improves. This helps feed your pipeline with more deals.
- Cut your spending habits. When you begin your career in real estate, be prepared to cut back on expenses and live more simply because you’re not going to see a lot of cash flow in the beginning. My advice is to keep your spending habits under control even when your real estate business starts to grow. Keep your personal and business overhead costs down so you can save more money and invest in training, software, and other real estate tools for yourself and your business.
- Remember, you can do this. Some days you might feel like throwing in the towel and giving up, especially when it feels like ages between closings. But keep it up. If I can be successful in this business, anyone can, including you!
Want additional financial advice? Talk to a financial advisor or CPA.
Maybe one of your goals for 2020 should be to save more money or work on building your pipeline so you can weather the real estate storm each month. Eventually those money stresses will lessen, and you’ll get better at handling them.
You’ve got this.
Jef Conn, CCIM, SIOR, is a commercial agent specializing in industrial, office, and investment properties with Coldwell Banker Commercial in Lubbock, Texas. Jef served as the 2017 president of his local association and currently serves as Region 1 vice president and executive board member for Texas REALTORS®. Connect with Jef on LinkedIn or via email: JConn@CBCWorldwide.com.