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Real Talk: Is a Career in Real Estate Right for You? | All Roads LTR Podcast | Ep. 42
20 Plays6 months ago
Join Matt and Katrina Meistering (CEO of Keller Williams Gateway) as the discuss into the often glamorized world of real estate, uncovering the realities that many don't see. Prompted by a recent conversation with a former client considering a career shift, they explore the common misconceptions, the importance of understanding the true demands of the job, and the reasons why many people fail to make it big in real estate. From the essential skill of lead generation to the need for resilience in a challenging market, Matt and Katrina offer candid advice for anyone considering this career path. Whether you're dreaming of selling homes or curious about the behind-the-scenes work, this episode provides valuable insights into what it really takes to succeed in real estate. Tune in to hear honest perspectives and practical tips from seasoned professionals.
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Transcript
00:00:09
Speaker
What
Interest in Real Estate: Fun or Challenging?
00:00:10
Speaker
kind of led to this conversation today is just yesterday, the day before, I had a client who I've sold a home to, beautiful home in um Baltimore, so in Roland Park, and he is going through a transition in his career and decided to reach out to say, you know what, Matt? What do you do looks fun, right? I've always loved real estate. And so, and Katrina's had this conversation, how many, what, thousands of times? Thousands of times. And so she's perfect to do it. I don't get these conversations every day, she does. And so he expressed interest. I love, you know, real estate shows. I've always had an interest. Man, I want to do what you do. It looks easy. Like I see it on social media. You're having fun. You're closing houses. You see all the smiles. Let's do it, right? It's good times. And so,
00:00:52
Speaker
ah You know, it's really challenging to have a conversation with someone to be honest, right? I care for him. He's a really good guy, family man, and he he has to make a choice about his the next steps in his life. And so that's a conversation I wanted to have with you is like, what do you tell people when they come to you and say, you know, I'm thinking to get into this career called real estate. I want to do it. Looks fun.
Financial Realities of Real Estate
00:01:15
Speaker
Looks relatively easy. Right. I love houses. I love people. What are you telling people right now? You have these conversations all the time with people transitioning into real estate or thinking about it.
00:01:25
Speaker
I would say that the it's really the same conversation no matter what the market is, even though our market right now is not the most fun market, to be in to be honest, is that I ask them why. What's the reason when you want to get into real estate? And when people tell the truth, it's because they want to make money. They say that real estate is an opportunity to make a bunch of money, which is true, by the way. And in general, um the people who don't say money, it's I want to make an impact, I want to help people. You can be a teacher. make an impact and help people. You could go work for a nonprofit. Why real estate? And it's because it's helping people and it's making a bunch of money. And that's what they see. They see selling sunset. They see Matt Ryan. They see people who are successful. Let's be very honest and then we'll continue. But what percentage of people make quote unquote great money in real estate?
00:02:11
Speaker
maybe like 2%. It's the number of people who make over $100,000 in real estate is a very small number. And nine nine out of 10 people don't make it. Nine out of 10 people who get the real estate license don't make it. And it's because they get in to make money. I mean, even i in our office, we have somebody who runs a pretty large nonprofit, sells real estate on the side to help fund the nonprofit. But in order to run a nonprofit, you have to have profit. Every business needs profit. We've got this kind of
Key to Success: Lead Generation and Sales Skills
00:02:40
Speaker
idea that that that money but the pursuit of money is bad. It's the love of money that's bad. It's the love of all of the things in our world that make it so that the pursuit of money is good. And so people get in for money, that's good. If you don't want to make money, you shouldn't get into real estate because it's too hard.
00:02:57
Speaker
If what you really want is to make 50, 60 grand and live a simple life, don't get into real estate. It's too hard to not go all out and want to make a lot of money. But in order to have profit, you have to have closings. In order to have closings, you have to have contracts. In order to have contracts, you have to have agency agreements. In order to have agencies, you have to have consults. In order to have consults, you have to have leads. In order to have leads, you have to have lead generation. in that order. And what people think about when they think about real estate is they think about that consultation sitting down, Matt, what are your real estate goals? Let me help you get there. They think about negotiating the contract, they think about showing the houses, they think about the home inspection. What they don't think about is where does the buyer come from?
00:03:39
Speaker
where does the seller come from?
Unique Challenges in Real Estate Sales
00:03:40
Speaker
And it's very different than like right now we're in a podcast studio. So Matt is a repeat client of this studio. As long as as he continues to be happy with the service, he will continue to bring business to this business and he will continue to refer. When did you buy your house Matt? Two years ago. Two years ago. When do you plan on moving? According to my wife, never. yeah yeah So I just moved last summer and i I'm going to die there. So unless I have a yeah real estate desire that is outside of my personal residence, which most people, it's their personal residence.
00:04:15
Speaker
If I was working with another realtor other than myself, I'm done. So the the business of lead generation and real estate is very different than most other businesses where somebody who's an insurance salesperson, they bring in a client, they continue to have that book of business over time. Even a car salesman. We were just discussing new, how often do you get a new car? every three or four years every three or four years and you have a wife who also has a car so you might have you might have a two-year turnover in cars so your car salesman they keep in touch they're gonna get business from you once every two to three which they never do by the way they never do because they don't follow up
00:04:50
Speaker
yeah And in real estate, it's seven to 15 years, depending. So you're constantly having to throw more people into the top of the funnel, more ah more business and
Honesty About Real Estate Challenges
00:05:00
Speaker
fewer people are buying houses. So I would say, i I really dig in with new agents on that lead generation piece of, are you willing to do what it takes? That if you don't have any clients, you're going to go out and find clients and you're going to continue to lead generate, talk to as many people as you can every day. And many people don't want to do that. And I want to be clear, this is not the the reason we're doing this conversation today isn't to scare someone out of ever considering real estate. I think it's just like the conversation I had with my past client. I want to be honest with them about what this is and what this isn't because the easier thing to do would be Oh, it's yeah I love it. I love it. It's wonderful. You know, just come on in. And you you don't recognize that a number of challenges and things you overcome and even successful people sometimes bow out for a lot of reasons because this is not a you know, we don't get the traditional life that that someone in a normal job would get. This is a very bizarre world we're living in. It's in we were just discussing. It might be a whole episode for another podcast about the lifestyle and how it can consume you. who And, you know, so I guess we can go into that later, but I don't want to get too sidetracked. It's just I'm just trying to emphasize that this isn't to discourage someone who might be listening to this from
Opportunities and Responsibilities in Real Estate
00:06:20
Speaker
getting into it. It's just being it's recognizing the reality of what this is. And I think one of the reasons why you and I are friends is because we don't sugarcoat things. We are who we are. we so well We're going to be authentic in whatever it is. And what i I think that real estate is an incredible career. It is an opportunity to make an impact on your world and people's legacies and to create wealth for families that didn't have that. Like the opportunity in real estate is so incredible.
00:06:50
Speaker
and where there is great opportunity, there's also great responsibility and It creates a whole different level of challenges that if you're not ready to get in you're not ready to do the work Yeah, I mean real estate super flexible. You can work whichever 16 hours the day you want. Yeah, and That when you don't have when you don't go in with your eyes open It's kind of like if you ever had a friend who got married and was like, oh my gosh, this is like a normal life just with somebody else. And I'm like, yeah, that's what marriage is. But people go into things with preconceived notions. And I always want somebody, if they're going to get into real estate, to go in eyes wide open knowing exactly what they need to do. And it's like one of those old fashioned water pumps. Remember those where you pump it like 10 times and water comes out? You never know exactly how many times you're going to need to pump it to have water come out. You just can't quit.
00:07:41
Speaker
What are the pros? So let's be positive for a minute. Right. So if you're able to make it, this is well, let's get back to is this an easy or challenging time to start in real estate in your opinion in terms of the market? ah It depends on how you're looking at it. You ever heard of that? And this might be a totally fictional story I'm about to tell. And I've heard it multiple times, so I'm going to pretend like it's real. Sure. If it is fictional, the guy who wanted to throw the discus in the Olympics. Have you ever heard that story? No, but don't let truth get in the way of a good story. Indeed, indeed. So it was back in the day when there was no internet, there was none of that. So he decides he's going to compete in the Olympics and he's going to throw the discus. So he goes to the library and he looks up the specs for the discus and then he looks up the record for the discus throw. He has a discus made and he yeah um starts training to throw at that bar. He never gets to the record and he's really discouraged. When he gets to the Olympics, he realizes that he had the old specs and now instead of being made of all metal, the discus is made of part metal, part wood.
00:08:38
Speaker
and he blows the records out of the water because he is so used to throwing the heavier thing that now when it's lighter it's gonna be easy. Anyone who is getting into the industry right now is
Surviving and Thriving in a Tough Market
00:08:50
Speaker
throwing the metal discus. They are coming in at an extremely challenging time and yet those who survive They are going to find when this market shifts again, because that's the only thing constant in our market is it's going to change. When it shifts again, they're going to find it to be so much easier. And in general, think about when you were when you were a new agent, how many of your people were first time home buyers? Majority of them. Majority of them. How many of them got seller help? Every single one of them. Every single one of them. When was the last time you got somebody's seller help on a deal?
00:09:21
Speaker
And to clarify, seller help is when you can get the seller to offer cash at closing to help cover the closing cost or part part of the closing cost for the buyer. right yeah So, yes, you're you're absolutely right. and Nowadays, you can't get that. You get left, if you put that on a contract, 90% of the time they're gonna laugh you out of the room. Right. Right. Exactly. So unless it's a house that's way overpriced and it's been sitting, you're not going to get it. So there's a lot of agents who would have cut their teeth on first time home buyers and really learned the business the way that you did by you know the low the the the first people, the the newer people, the newer buyers, et cetera. It's just those people are not able to get houses right now. So the number of houses to go around is already the lowest it's ever been.
00:10:04
Speaker
Now, the National Association of Realtors is down in realtor count this year, and yet the last several years, we added a lot of realtors. Well, and that's just cyclical. So when times are good, realtors just jump in. like that's And Gary Keller always talks about it, and everyone else that that has a a stage, they'll describe that you can look at agent count in this country, and when it peaks, when it's at new highs, the The turn, right, it's right around the corner. Like typically the market is going to, it's been good, obviously. And the market typically turns thereafter, right? Shortly thereafter, you start to see dips and agent count just drops dramatically, typically.
00:10:44
Speaker
but And part of it is that in the in we all thought 2020, COVID hit. We're like batten down the hatches. This is it. this is We're going to have a huge recession. and The market's going to shift. It had actually been, I did a did an analysis. It had been the longest that we'd ever gone without a recession, a true recession in our country. sure and And that didn't happen. And fish were jumping into the boat. And if you had your license, you were getting deals. And i what happened is a lot of people increased their income, so they increased their lifestyle based upon a market that was never going to last. So what we're seeing now is some of the people who are getting out of the business are those brand new agents who don't have those first time home buyers to cut their teeth on and it's just it's taking too long and too much work.
00:11:28
Speaker
And we're also seeing some pretty successful agents get out simply because they um they sold 30 houses in 2021 and then 15 in 2022. That means their income was cut in half. And now they're at that point that they can go get a J-O-B, a nine to five, that people are not calling you at 9 p.m. They're not calling you're not showing houses all weekend. that You get health insurance. and you and It's a much less stressful lifestyle. And you can pay your bills and these people, they're working too hard for the money that that they're making selling fewer houses. But because they don't because they don't know where the business came from when it was good, they can't make more of it.
00:12:06
Speaker
Yeah, so that that is part of the question. It's like, what are you experiencing? So I can tell you my experience as a realtor, but it's different. The issue is some people are still having maybe the best year of their lives. It's possible, any individual, right, that the stats don't count. But when you look at the more general, you'll see what the truth, the health of the market is. But what are you seeing currently? Like, are people still entering the market at in terms of agents? Are they still coming in or is it a lot harder? Because your job, partly, right, is to help recruit and grow the office. Is it challenging right now to get people to join or you know, new people or is it or are they still coming trying to join? I hope that everyone who is thinking about getting a real estate license listens to the first part of this conversation and actually really considers because most of the people who come across my desk have never heard the term degeneration.
00:12:55
Speaker
So as a result, they don't have any idea that it's not an easy time to get in, and the barriers to entry are low to get your real estate license. We're talking about less than $500 to take the class, a 60-hour class, and take the test. If you were going to become a cosmetologist, it would cost you far more money and far more time to cut hair. And yet we entrust people with 60 hours of an online course to help people with hundreds of thousands of dollars worth of transactions. And it's a little scary. No, we still have plenty of people getting in. It's the people getting out that we're seeing more of.
00:13:30
Speaker
Interesting yeah, i I I see that as well, and I always as someone who's been in it. I've You know I almost look forward to it. I like the good times right in the past couple years It's been lovely, but the challenging times I always try to look at it to say what's the opportunity here the opportunities people will be exiting and it allows me to have a stronger foothold in the community and And if you do really well and I've saved my money and I'm starting to invest in even more marketing, like this is the time to grow as an agent, in my opinion. So if you've been around in ah for a while and you're listening to this, this is the time when you should have been having your reserves to put forth into market. I've increased marketing over the last six months, not decreased. I'm cutting a lot of other things in my life. I told you I'm cutting back in other areas. but
00:14:16
Speaker
I am marketing, I'm trying to grow market share now, because as I've been told, during hard times when you grow market share, when things get better, you typically keep that percentage. you keep you you know It's time to gain, it's time to grow, and then when times get better, I'm i'm there, right and I'm gonna ride that tidal wave up. Market share gained in a recession is regularly lost. Market share lost in a recession
Advice for New Real Estate Agents
00:14:40
Speaker
is regularly gained back. That's where these people who are like, I'm going to go get a job and I'm going to sit on the sideline and wait for it to get better, they're never coming back. And if they are- You shouldn't wait to buy a house until rates get cheaper. that getting cheap yeah Yeah, it's the, there are so many, um in general, there are a few things you should wait for.
00:15:02
Speaker
I think just in life, like if it's if you're going to do it six months from now, why not today? I think about, this is kind of a weird example, but when I had my first baby, I bought maternity clothes almost immediately. I'm like, why? I'm going to buy them eventually. Why not do it now and get the full enjoyment and be comfortable for all nine months instead of only comfortable for the last five months because now I can't wear regular clothes? I find that in general, like if you are thinking about going to get your real estate, let's go get it now. Go get it now. If you're thinking about buying a house, go do it now. there's all there's there's There are things to wait for. and then but in I would say that more people are held back by waiting than going out and doing it has been a detriment.
00:15:46
Speaker
So if you're gonna go for it, this is by the way, I'll give you what I, the advice I gave, I started the story describing a client that called me and had this idea about joining. I encourage him to do just that, to jump in to this industry of ours, two weeks he's gonna get a license. That's how quick it is. So he's gonna knock out his license and then um I told him, I encouraged him to get his, like continue the job While he does this part-time to learn, he needs to learn, in my opinion, to lead, generate, how you describe, to develop his database, his sphere, the people that trust him know him like him, because as good as I think I am, right, I don't know who the people that know him. He has instant credibility I don't have, and he can absolutely learn our business, and those can be his clients. And then over time, I would encourage him to, potentially if he loves it, to then jump.
00:16:39
Speaker
And so I started part-time. if if it If it's an option for you, go part-time. that's That's what I'm encouraging him to do. And I should add, hopefully, right, he works with me. I don't know. We haven't gotten that far, but join a really good team that has the ability to coach or join a brokerage that has coaching and learn. And don't just think you know it all. You know, be in a position for at least a year or two where you are around people that have talent and are successful. And i I agree with you there that there's times people say, I quit my job. I'm like, yeah all right. And what, especially in this market where you might not make any money for a year. yeah Like that's the, that's the bottom line truth. And that the, it used to be that we're like in a really great market. If you're killing it 90 days.
00:17:21
Speaker
and I tell people all the time, like we call I call them dual career because I truly believe that it's dual career. it's the you have two very You have two different focuses and in that though, you need two things. in needa You need a pipeline and you need reserves. And then the level of reserves that you need in order to quit your job depends on your pipeline. And the number of the amount of pipeline you need depends on your reserves. If you say right now, I have in the bank four years worth of reserves, go quit your job. Do it. You'll be fine. You will start to sell houses and you will start making money in enough time. But when you say I've got 90 days of reserves, do not quit your job. Now, if you say I have 90 days of reserves, but I have a $3 million dollars buyer who wants to go under contract next week,
00:18:03
Speaker
All right, you might be fine in that case. So it has the pipeline and the reserves and what happens with a lot of dual career agents though, because they're working really hard and they finally sell a house and they get the that commission check and they're like, honey, we're going to Jamaica. yeah And the next one, they're like, ah, you know what? I've been really wanting to get that truck. I'm going to put the down payment on that. So instead of building up their reserves, they add fluff to their life. Right. And if you ever want to be full time, you have to view it as every check that you get in real estate is going towards those reserves so that you can quit your job. Because I do, unless you are, there's a couple of people who are dual career that they have extreme flexibility in their day job and make a lot of money. Like I was talking about somebody makes like 200 grand works about 10 hours a week. I do not quit that day job.
00:18:49
Speaker
And yet for most people, you're not going to live a life worth living if you're doing both. It's a sprint in this case and sprint as quickly as you can to get through to the point that you can quit your job because you have the pipeline and the reserves. Right. And i I was part time for seven years. I jumped because I had the opportunity. They offered to lay me off and pay me a severance. And that's what I did. Right. And some people have a spouse that they're like, we can live with my spouse's income. I do think that the minute somebody can reasonably quit, they should, because if you, it's kind of like the idea of, um, have you ever heard of burn the boats? Sure. That you go in and whoever it was, was invading and they burned the boats behind them because there is no, there is no going back.
00:19:27
Speaker
Yeah, if you have a plan B, the likelihood of you being successful with plan A is and is challenging, right? Because, you know, just this, I've been doing it forever and just this week, three days of the last four, I've been at the office past nine, nine 30, I get home and everyone's asleep and I have a dinner and cold in the fridge. Like, you have to be that committed to being successful and then I, the way, i the reason I work that hard is because if I when if i take on a client, in my opinion, that a level of trust and that i've that I take on, right? And the level of responsibility I feel towards them is immense. And I'm not gonna take you on and agree to work with you if I'm not giving you everything. And whatever that means, time-wise, I'm gonna do. And you know so the commitment towards your life, that's just, it's ah that's the challenge. And I hope that you know you're willing, and you know if you're listening to this, to to potentially
00:20:20
Speaker
suck it up and do what's necessary to fulfill commitments that you make and doing so with your eyes wide open. And, um you know, I enjoy it. I enjoy what I do. So I'm willing to do it. But I hope it I figure it all out before I burn myself completely out because it's not sustainable forever. It's not sustainable forever and that's I think the myth that a lot of people have is that, well, I've got to balance my life.
Work-Life Integration in Real Estate
00:20:44
Speaker
I've got to be at home at five o'clock for dinner. I tell you what, I am not home at five o'clock for dinner most nights. I work in real estate and my family lives a good life because I do and yet I'm going to take all morning off Friday because my four-year-old's graduating from preschool and we're going to live that up.
00:21:03
Speaker
And that's what I say about the flexibility. The beautiful thing is it's, it's not about balance. It's about counterbalance. It's I'm going to go, I'm going to sprint for a little while in business and then I'm going to pull back. Like you your, your structure of operations is going to going away to Greece. Yep. for a month and month yep that's gonna be tough for you and that's probably the counterbalance that she needs. That she's been running really hard and you guys have been the encountering the difficult ah difficult market and she's gonna have time to recharge and refresh. She's gonna come back a much better ah much better employee, a much better asset for people just simply because she has recharged. And here's the other thing that I've realized is that the beautiful thing about real estate is it doesn't need to be balanced, it can be integrated.
00:21:47
Speaker
and Like right now, you and I are doing real estate and you're an old friend and I'm enjoying hanging out with you. but it's not I had lunch with another realtor who's with a different brokerage who we've been we went through um some personal development courses together. Really amazing lunch. When you're working with buyers and sellers, how many of those people become your friends? Ask you out to dinner, invite you to the cookouts. that hour That's the beautiful thing is that when you've been in this long enough, it doesn't necessarily need to be balanced, it can be integrated.