"I'm going into real estate, and I'm gonna get rich". Bet you've never heard that one before, huh? Buying a home is the largest purchase most Americans will ever make, and the large sums of money involved tempt many to get their license in the hopes of "getting rich" in real estate.
So, if so many people get into real estate to get rich, then why does the average Realtor® make only around $50,000 a year? What's the hidden drag that slows so many people down? It's a single word: work.
Every career agent that I know works their butt off. I've met agents that make millions in commissions a year - but they're in high-value markets, typically managing a substantial team, and they spend every waking minute on the phone, at their computer, talking with clients, or managing listings. In other words: work.
One problem is that most people who get into real estate to get rich don't want to invest the time, energy & money into making it work in order to achieve their goal. What they're actually looking for is what you'd call a “scheme”. Oftentimes people with this mentality float from multi-level marketing, to flipping houses, to social media schemes - one get rich quick scheme to another, but without investing the blood, sweat and tears to actually get rich.
Another problem is this: lack of opportunity from a saturated market. The first few people into any new market make a killing - even in REO, which is built upon the failure of real estate. Others saw their success, realized it was lucrative, and then over-saturated the market. Now the crumbs are spread so thin that no matter how great the scheme sounds, you’re competing against thousands or millions of other folks pushing the same scheme, the same way, to the same audience.
So what’s a scheme vs. a genuine business opportunity? I view a scheme as a way of making money that’s so profitable, so easy to do, that it seems like it just shouldn’t exist. Like multi-level marketing: I sell you some soap, you sell it to your buddies, they sell it to their buddies, and I get 2 cents for every bar sold, and you get 1. Amazing profits! But only for the first few people in the door.
My boss has a saying: “base hits”. These days, that’s all he or I need to say to each other on the subject. “Hey, how the new product launch go?”, and I answer, “base hit”.
Base hits are good, because you can’t always hit a home run, but if you produce base hits consistently you can still reach home plate.
Would it be nicer to have a home run? Hell yes! In marketing, we have those happen, too. Every now and then, I have a campaign, or a radio show topic, or a Facebook post that goes absolutely viral, which makes it absolutely profitable. I love it when that happens.
Unfortunately, that happens about as frequently as hitting a home run in baseball, so the rest of the time you try to produce base hits to keep the sales & marketing pipeline full.
Now, in your personal life, things are no different. Base hits are those small daily accomplishments that take you from where you are now to where you want to be. They add some predictability to life, and they keep you moving forward, even if it takes longer than you’d like.
Unfortunately, the “get rich quick” crowd usually neglects the base hits. Like in baseball, they’re waiting for the perfect pitch so they can swing as hard as they can……which ultimately means they spend a lot of time at the plate letting the ball go by. Meanwhile, the rest of us hit the pitches we can & move forward, one base at a time….
For what it's worth, and I know a LOT of real estate agents & brokers, long-term professionals tend to feel insulted when they hear about "getting rich in real estate" - even if that's how they got rich themselves! The reason is that money is a product of professionalism, qualify of service, and long hours of hard work when everybody else is taking a vacation.