29 Nov What Does it Take to Become a Real Estate Professional?
Chris is the Amazon Bestselling author of Real Estate on your terms – Create continuous cash flow now, without using your cash or credit. He’s also founder of SmartRealEstateCoach.com and SmartRealEstatecoachPodcast.com.
Chris has been in real estate for 25+ years. His experience includes the construction of over 100+ single family and duplex homes (mostly 1990’s and selectively to date), has owned a Realty Executives Franchise (Massachusetts 1994-2000) as broker / owner which maintained high per agent standards and eventually sold to Coldwell Banker in 2000. The 2000’s included coaching ½ million and higher realtors in order to scale & automate their business throughout US and Canada. He also participated (and still selectively to date) in doing condo conversions (multi-family homes to condos) and “raise the roof” projects (converting single-family ranches to colonials in growth neighborhoods).
Chris has been a big advocate of constant education and participates regularly in high-end mastermind groups and consulting with private mentors. He runs his own buying and selling businesses with his family team which buys 2-5 properties monthly so they’re in the trenches every single week. They also help clients do the same thing around the Country.
Chris and his family/team have done over 80 million in real estate transactions. They mentor, coach, consult and actually partner with students around the Country (by application only) to do exactly what they do.
Good morning and welcome to listeners. I’m Chris Prefontaine and my focus weekly is to give you an expert that can help you make a quantum leap in your business, your finances and/or your life. Buckle in here while we bring you the next master’s class. Now, class is in session. We’re going to kind of take a diversion today, guys, for all you listeners.
I’m going to actually do one of what I call solocasts today with you. I’m going to revisit some of the points that we addressed at the 2017 QLS event. I can’t encourage you enough to make sure you get to the 2018 event. It will be held in September. Check the website soon for deets. It will be held in Newport, Rhode Island again. It will be capped at 100 people. Obviously, the associates, the associate members, the club, the starter, the merchant in the high six, have priority, and then we fill the rest. Be sure to get there. It’s going to be a blast.
The main title, I’m going to go into some different areas today, but the main title of this show is “Are You a Real Estate Professional?” There’s a bunch of meanings within that and I’m going to go over it with you. First of all, how long, I want to get you thinking here. How long do you think it takes to become a professional real estate entrepreneur? That’s number one. Number two, what does it cost to become a professional real estate entrepreneur? And number three, how much will you earn when you become a professional real estate entrepreneur?
Now, a couple of things I want to address with those questions right away. First of all, when we look at the different associate members around the country and start to consider what the different paydays are — payday one, payday two, and payday three — the numbers are rather large. I’m going to give you our actual numbers, which change monthly, but I’m going to give you the actual numbers I gave everyone at the 2017 event because I want you to get your hands wrapped around what you can actually earn when you create three paydays.
Now, just as a disclosure, as you can imagine I have to say this. Look, your results may vary, but I’m going to give you our actual averages, and if I talk about the different associate members around the country and their averages, then, okay, you can weigh that in and you can decide, hey I can probably beat that, or I’d be lower. Whatever you want to do, to figure your business plan. I’m just giving you what I’ve seen for results. That’s number one.
Number two, when I say what does it cost to become a professional real estate entrepreneur, well look. Some people come to us brand new, like Mike in California, and they have success because they’re coachable, they learn the material. He happens to be a high six member, but as of this show recording, by the time it airs, he’ll be higher, but he’s on this third deal. When you start to do the averages, you do the math, times three. It’s rather large.
[bctt tweet=”“Some students have success quickly because they’re coachable.” – @chrispre”]
That’s a little different than someone like Dawn or Sergio who have been featured on the show and took six or seven months to do their first deal, but now are upwards in the six and seven figures. Everyone’s going to get started a little bit differently. Dawn and Sergio happened to spend a whole bunch of money before meeting me. Now, they’re not happy about that but so be it, right? When I ask the question, “What are the costs to become a professional real estate entrepreneur?” I don’t know what it is for you. Just be open-minded and be open to managing your expectations about how quickly this gets going.
Now, in doing coaching, myself, since around 2000, the most common question I get, relative to the comment I just made about expectations is this. How long does it take? We could talk for an hour, and maybe on a different show I’ll do it, about managing your expectations, but let me say this. Everything we teach is not a push button, get rich quick. Everything we teach is not a just do this online and everything will happen. It’s not. So if you’re looking for that, if you’re looking for that quick fix, if you’re looking for the next deal like you need water, then maybe this isn’t for you.
I just want you to manage your expectations with me. I don’t want you to get too caught up in it. What we did at the event is we took a real close look at all the things that you’re going to have to learn. I’ll mention a few. Skill. Okay, skillsets. That’s kind of your game plan/your money producing activities. In other words, what are you going to do every day? Right? I’m going to help you do that when I’m working with you, and when my team is, my kids.
Mindset. Mindset’s a big piece of this. You know, we’re going to have Dr. Joe Vitale at the 2018 event. He’s going to, for an hour and a half, address this. I got to tell you, whether your realize it or not, all of us let the mindset get in the way and it’s a big issue. Then of course, expectations and earning a profit. Then I invite you to honestly evaluate where you are today versus where you want to be, relative to those things I just mentioned. So, let me say it again. Skill, game plan and money producing activities that you do every day, mindset, expectations in earning a profit.
Where are you today relative to where you want to be? Once you start looking at all that, you’ll quickly realize that no matter how much time you presently spent learning, back to my initial questions I opened the show with, it’s still going to take a lot of time, guys. We’re going to try to shorten that cycle, if you decide to work with us, over and over and over again. If you have another mentor, fantastic, because I’ve had a lot of great guests on the show this year. Make sure they help you shorten that cycle.
I want to read you a quote. It was in a book. It was by Frank Williams and it was in a book called, “If You Must Speculate, Learn the Rules.” Let me read it to you. “If you are intelligent, the market will teach you caution and fortitude, sharpen your wits and reduce your pride. If you’re foolish and refuse to learn a lesson, it will ridicule you, laugh you to scorn, break you and toss you to the rubbish heap.” So why’d I want to share that?
Well, in our office, our family team, we act on everything. In other words, if we have a curve ball thrown at us, and that goes for our education and coaching business as well, but I’m talking about doing deals, when we have that happen, not only do we act, at our weekly meeting and change whatever that challenge or curve ball or speed bump was that we hit or expense, you know? But we also make changes to the programs that we offer, as well as any forms and checklists and legal things that need to be changed. Then we share that immediately with members.
All that to say, as part of your learning curve, we’re in the trenches too. We learn just like you, and as things come up, we adjust as needed. Let me do a few things with you here. Let me first give you the, when I talk about profits, let me give you what you can expect for profits if you are in line with roughly our averages, okay?
As of the Fall of ’17, when we had our event, payday number one was averaging us, for example, $26,503. Now for those of you who have read the Amazon bestseller, “Real Estate on Your Terms,” and/or the “Eat That Sandwich, Eat,” book, I hope you have. For those of you that have read that, you understand that the $26,503 on average payday one is not necessarily all upfront. I wish it was. There’s plenty of them that are, but the majority of them, when my son Nick, our buyer specialist, sits down the buyers, he’s structuring that average of $26,503 over time.
Let me tell you what that might look like. It might look like, depending on the price of the house, that they put down $10,000 with the signing of the buyer letter of intent, which is kind of our forms package, and then of course with the attorney, right? The additional $16,500 might be the next February’s tax refund and then the following year’s tax refund. Those three total, might be $26,503. So just so you understand, it’s not always upfront, as again, just full disclosure.
Payday number two can range you anywhere from $300 to $500. We’ve had it as high as $1000, but payday number two is the spread every month that you get between what you’re taking in from your buyer and what you’re sending out to your seller or your mortgage company. Pretty simple. Our average is right now at $313.
Now, if I look at that over time, payday one has increased. Payday three has increased. Payday two has settled if not gone down. Why is that? You run your business how you choose, but we put more weight on the total package. We put heavy weight on payday number one. I want skin in the game before they get the house. Our biggest headaches have been when we didn’t do that. Payday number two is important but it’s not critical. It’s not, it’s not the mean crux for the deal.
Then payday number three runs $25,000 to $50,000 so if you add up all of those, depending on the term, 12, 24, 48, 60 months. It depends. We’re averaging around $73,000 now, all said and done, all paydays. When I start talking, Mike’s doing three deals and Don’s done nine and Sergio’s done six or whatever the numbers are, you figure that times, okay, 73 if we’re creating three paydays in every deal. Now you start to see why I say my three opening questions, how long do you think it takes to become a professional, what do you think it costs and what will you earn, because those things have to be in alignment.
[bctt tweet=”“The average payday over the life of one deal is around $73,000.” – @chrispre”]
If someone says to me, I’m not sure I can afford one of your associate levels, my answer in my head, if I don’t say to them, is relative to what? I mean you have a chance to make $73,000 per deal, if you’re using our averages over time, and maybe you want to dumb that down to $50,000. I’m okay with that. But if you want to, let’s say use your number of $50,000 and you say I think I can do one deal a month this year, which is very realistic for almost anyone I could possibly think of, well that’s 12 deals times 50. You do the math. It’s a pretty impressive number still. I hope that is getting your wheel turning a little bit.
If you look at our associate levels around the country, the club level, the starter level, the immersion, and the high six, you can go on our website, but those range from, I don’t know high $80,000 range down to around $10,000 for you to participate in those. Is that a lot of money? Again, I’d ask you to think about relative to what? Let me give you an example and I’ll just go through these kind of rapid fire, bullet points.
A doctor is going to spend a minimum of nine years in college and once their practice is set up, for the first few years, depending on the specialty, they’re going to earn maybe $150,000 to $200,000. These are numbers from an old internet survey, so these could be even a little conservative but let me just go through them with you. An attorney is going to spend approximately eight years in college and once their practice is set up, depending upon their specialty, they might earn $120,000 to $170,000 at first. I bet you some attorneys we deal with don’t even make that.
A judge, they’re going to spend eight years in college and then they must practice for 15 years as an attorney so that they can then get a job paying $100,000 to $110,000. Go figure. A CEO spend four to seven years in college and generally 20 years in business learning the skills required and will then earn $150,000 to $350,000. I kept that real broad depending on the survey that I read because, look in my opinion, and my son-in-law Zach mentioned this at our meeting, at our event rather. Sorry. A CEO, a lot of them, he uses the example of his uncle, is on the road. You can interview many of them. We used to have a neighbor who was super, super successful. Sold a $2 million sailboat, traveled the world. But when he’s working, he’s not seeing his family, and I’m talking about at all.
That’s, if that’s something you want to do, okay great. Give it four to seven years. Go out and make that and travel the world if that gets you going. Let me keep going here. Interior designer, they’re going to spend about four years in college, minimum and then they’re going to earn 50K a year or so. I’m trying to mix this up with your different professions so you can compare this to what I’m talking about with the real estate, which in my opinion doesn’t even compare.
Commercial pilot, eight years between college and military training, perhaps, so that they can get a job starting at what, around $60,000 and eventually earn up to about $180,000 a year. CPA, I love our CPA, but how do they do it? I don’t know. They’re going to spend four years in college, an additional two years studying to take the CPA exam so that they can then go out and average a crushing $60 to 80 grand to start out and then if they build their own business like ours does. I’ll end off with this one. Schoolteacher, sadly enough, spend a minimum of five years in college, in many cases, six to seven and sometimes eight, so they can start at what? Average of 45 grand a year? Maybe it’s gone up since I looked at that survey, but still. Come on. 45, 50, 60, even if it was 100 grand a year, look back to what I told you. If our numbers are running, our team now are running around 73 grand for all paydays — you do the math? I mean, what? I don’t know. I won’t even comment on that.
In each case though, I think you’d agree that these people are prepared to do two things. Super clear, they’re prepared to, and they’re already to prepared to if they’re in those professions, number one, invest a tremendous amount of personal time, right? So that they can have a career. And two, spend a tremendous amount of money preparing to earn the type of income that we’ve described above. When I say above, I read my notes here, so sorry. I’m talking about the doctor and the CEO and those ranges I gave you, they range from $45,000 to $300,000, $350,000.
I don’t know. I tell the students I have without mention their names that some of the associate level members, I tell them, I don’t know what’s stopping you from just going, doing 12 deals a year and getting out of your J-O-B. It’s got to be driving you nuts. They just chuckle, and say yeah. Some of them are making that transition very pointedly, after having an office visit here with us, which comes with most of the associate levels. They leave here with a tremendous game plan. Some of them have left here with exactly that, and some don’t. Some like to juggle both and that’s okay. They like what they do.
So here’s the major question for you. Going to go right back to what I started the show with, and that question is, how much time and money are you prepared to spend to create the income flow that you’d like to have for the rest of your life? Now, you can answer that. How many months are you going to spend? You put, jot that down. I encourage you to. I hope you have a journal and you should jot that down. Then how much money are you willing to spend?
[bctt tweet=”“Are you prepared to create the income flow that you’d like to have for the rest of your life?” – @chrispre”]
Let me give you a facetious example. If you knew after a learning curve of 90 to 180 days — I’m being conservative — you see on my site, some of the students have done a deal in 30 — but that’s not the norm, so I don’t want you to count on that. I want you to count on 90 to 180 days. Let’s say you’ve had the wherewithal to sit through that and manage your expectations. Then, after that six-month point, let’s say you cranked out 12 deals. So let’s say it took you 18 months to crank out 12 deals, and let’s say that your market happened to be like ours, and you happened to hire us to help you and you happen to do about the same average of 73. Let’s dumb it down and say 70 times 12. You make the determination when you answer this question. How many months and how much money would you spend if that just produced you $876,000?
Now because it’s three paydays, 12 times 70, it’s not 8-something that year, right? But you created that much income. You got all or most of your payday ones. You get all of your payday twos and you’re waiting for your payday threes. That’s a pretty cool little business. Let me give you an example, and I’m going to go up to the top of my head with this one.
I announced at the 2017 Fall event that our numbers, as a team, we had done 19 deals as of when I announced this to them, and I gave them our exact averages and I’m going to go from memory. Actually I can probably call it up which I’ll do here. I gave them the following numbers. 19 deals were done. The average numbers looked like this. From payday number ones, it was $481,000. Payday number twos, now this will be interesting to many of you. Picture this. Payday number twos, we increased, not got up to, increased with these 19 deals, our net spread monthly, so that’s payday number two, to $5198.31. I’m reading you our exact spreadsheet.
Payday number threes, we created $726,658.06. That’s exact. Now what does all that total? If my Excel spreadsheet is right, we created with 19 deals, in about 10 months time with this particular business we have, this profit center, $1,395,249.66. So here’s a question. Here’s a thought. If you could create 19 deals that created $1.39 million in income, almost $1.4 million, that was going to come in in the next 12 to 48 months, maybe 60. I think all our deals are under 48. Mostly 36. Would that be worth your time?
[bctt tweet=”“You could create 19 deals that created $1.39 million in income in the next 12-60 months.” – @chrispre”]
Now when I start to say our associate level memberships range from a high of 80-something thousand down to 10, we actually have a 90-day jumpstart that it’s only $5,000. It’s an easy way to ramp into what we do, now those numbers kind of seem small, I hope to you. Okay. I just wanted to get you thinking about that. It’s nothing more than a little bit of a thought process for you.
Now, here’s what, after 20 whatever it is now, 6 years or so in the business, and our team has a combined experience of our 50 years, we kind of look back and say okay, we’ve determined now for sure, what the biggest obstacle is that real estate professionals face, or I should say obstacles in building a successful business. We’ve concluded that any one of the following could get in the way and these are the things we’re going to help you with.
I want you, I wanted you to hear this on kind of a private show today. I won’t go in any particular order. Let me bullet point these few so you can get thinking about hmm, that sounds like me, or some of those sound like me, and yes I’d like to get to those numbers that Chris was just talking about.
Inability for example, to set specific goals. Inability.
[bctt tweet=”“The inability to set specific goals holds people back.” – @chrispre”]
Difficulty of maintaining a positive attitude in a sometimes negative environment, and I’ll tell you that over time, I’ve just become less and less and less tolerant of negative environments and just pointedly removed myself from them.
Next, inefficient use of time. Guys, we could do a seminar on time-blocking. I don’t want to bore you to tears. What I will tell you to do is this. Go to Dan Kennedy. He’s one of my mentors and friends. Go to his “No BS” Book Series. Do it on Amazon or go to his site, but get the “No BS Time Management” book. He’s updated it several times. I will tell you that I would suggest you read it at least three times a year for the next three years. That’s how much I think you’re going to enjoy it.
We gave it as a gift to every single participant of the, every single attendee of the 2017 event, so if you come to the ’18 event you’ll get a cool book. It won’t be that one. It will be a different one, but you definitely should buy that and read it. Dan Kennedy’s “No BS Time Management.”
Next, soft skills. I think you’d agree that this one is overwhelming because if you knew exactly what to say, when to say it, you’d be chomping at the bit to get on the phone with a seller or a buyer and let them ask you questions. You just couldn’t wait. That’s where you’ll be over time with us. It’s pretty interesting to hear some of the live calls that the associate members do around the country that actually send us those. Some do, some don’t. Some can record because of the rules in their state and some can’t. But the ones that we’ve heard, it’s absolutely astounding to hear the progress they go through from day one to month three let’s say. It’s exactly the same way my son-in-law Zach and my son Nick built their niche roles in our company by studying scripts. They’re very well-scripted and that gets the results that we get on a daily basis and we’re constantly trying to improve that.
In fact, if you guys want to see experience, immerse yourself in exactly the road, the path that my son-in-law Zach took from duplicating, from not knowing anything in the business and then duplicating me going out and doing all our buying. I don’t do that anymore for the family team. Then you want to get your fingers on the seller’s specials program. I think it’s on the website for $19.97. If you package it with something else or if you’re a member, you actually get a 10% discount. Check that out. Seller specials program. It literally goes through hours of video, every form, every script, everything that he did and that we do, so that you can do it yourself and then literally hand that manual off to someone else you’re training. That’s skills. I could go off on a tangent on that for a while.
Next is a lack of commitment to the business or expectations not in line. These are huge. I alluded to them earlier. I don’t want to be redundant, but the commitment balanced with managing your expectations is super important. For example, if you’ve never done any deals, and you need to pop a deal earlier, as I said in the next 30 days, then is that normal to expect that 100%? I don’t think so. Can you do it? Sure. Sean comes to mind. He’s a police officer in Pennsylvania. In his first 30 days, he did a deal. He then got busy with life and didn’t do many after that, and came back to our event, and him and his wife are fantastic and they’ll probably do a whole bunch more deals. Does that mean you’ll do a deal in 30 days? I don’t know. I don’t know you well enough but you could.
Next, no mentors or coaches or bad mentors or coaches. Guys, there are some phenomenal interviews that we’ve done. If you can’t find a coach on smartrealestatecoachpodcast.com, then something’s wrong. There are just some phenomenal coaches there. It doesn’t have to be us, but for goodness sake, pick someone on there, and then once you do, don’t look left, don’t look right. Don’t look back. Put the blinders on, and many of my students will tell you, put the blinders on for three years. You’re starting a business, as Mike in California so eloquently said, so perfectly said at the event.
But I’ll tell you, do it for 12 months. I need you to commit to me and say look I can do this with you for 12 months. I’ll put the blinders on. I won’t do anything but what you tell me. If you can do that for 12 months, you’ll love the experience. If you think you’re going to have a challenge doing that, I’d tell you don’t do it. As much as I’d love to have you as a client.
The next one, and I’ll wrap up here is lack of a proven and simple system. You know, here’s the deal guys. Success leaves clues, right? You probably heard some of the interviewees say that on my podcast. Well, someone’s done it. Someone’s done what you want to do. If my style or my kid’s style matches where you want to be, if our numbers that you’re hearing matches what you want to create, then, by all means, get on it. Get after it and let’s get you into the proven, simple system that we have.
The list goes on and on guys, but after looking at all of these things I just stated to you as kind of challenges and things that are necessary and things that you might hit for obstacles, we’ve come to the conclusion that the single biggest ones are the ones that I mentioned at the outset of the show, and that’s the whole skills, commitment systems. Okay?
If you’re taking notes and if you’re not, go back and do this again, but if you are, by all means, asterisk those and make those a very important part of what you’re doing. I could go on and on guys. This stuff is second nature to us and we love teaching it. We love helping others. I hope you find the podcast super, super helpful. Guys, for goodness sake, go take action. I threw a bunch of things at you. Whether you take action with me, whether you take action with someone else, go take some action. This week, today, the next hour.
Also, be sure to see the show notes below this podcast, because you might be on iTunes now or somewhere else, on Stitcher or someone else’s website. Go to smartrealestatecoachpodcast.com. Check out the show notes and some of the things I refer to and some of the links that you’re going to want to get your hands on, and by all means, rate the show, guys. If you like what you’re hearing, rate the show. It helps us a lot. Get your butt over to iTunes and give us a five-star rating and some cool comments if you liked it. If you didn’t, give us some suggestions in how we can improve it. That’s what we’re here for.
I’m going to wrap up on those notes, and I hope the whole commitment/expectations/what you’re willing to give to get, at the tail end of this thing, and I don’t know when you’re hearing this but make next month your new year. Make next quarter your new year. Whatever it is for you to hit the restart button. I encourage you to do that. As always, I encourage you to listen to this show over and over and over again.
Look, I always tell my guests, and I’m going to tell you, we all have, each of us, you listening to me right now, we each, right now, have 168 hours of weekly time. That’s all we got, guys. You spent about a half hour with me today, so I appreciate that, but do this for yourself, your family, all those you hang out with and all those you really care about. Spend some time on you. Spend some time carefully selecting a mentor or a coach or someone you can latch onto and then don’t look left, right, or back for 12 months and make it a great, great experience. Make it a great week. Hope to chat with you live real soon.