Entertaining for Fun and Profit

There! Everything is mise en place, the sausages are on the grill, the water’s heating for the coffee, and I have seven minutes to spare. As soon as my friends get here for this morning’s little brunch and tête a tête, all that will remain is to flip the meat a couple of times, toss some milk and flour in the blender, whirl the stuff around, pour it into a hot pan with melted butter, and stick the thing in the oven. Fifteen or twenty minutes later: voilà! A brunch that can’t be beat.

Well. It could be beat if I were serving something like champagne, tequila sunrises, or bloody Mary’s. But they get coffee and grapefruit juice. This is Monday morning, for hevvinsake.

La Maya and I have invited our realtor friend, whom we’ll call JS here, for a nice brunch and some prospecting conversation. He’s interested in laying the groundwork for future client relationships (La Maya and La Bethulia have expressed some disenchantment with their long-term realtor), and she and I are both interested in learning whether the real estate business is worth pursuing for retired academics.

La Maya has another eight or ten years before she can retire, though she’s expressed an interest in retiring at the earliest possible moment (like, oh…maybe tomorrow?). I’m already on the street, having been laid off two years ago and found that no one will hire an old bat to do anything, at least not anything that pays as much as minimum wage.

I need to earn more than adjunct teaching pays—not much more, actually—and it needs to come in year-round. La Maya thinks she’ll need something after retirement to keep herself active and to help her and La Bethulia continue to live in the style to which they intend to remain accustomed.

She would be a great sales person, because she has a warm and engaging personality. Me…not so much. I’m a writer because sitting in my garret suits me, and in fact it may be the only thing I can do. But still…I do stand up in front of 25 or 30 adult students on a regular basis, so maybe I can pass for something less hermitic.

* * *

Several hours later

That came off nicely. The food was good. The dog was a pest. The human company was convenable. And we learned a lot about starting in the real estate biz.

First, what we know is that JS and his wife are both MBAs from good schools. They each had respectable corporate careers, which after a number of transfers took them to Minneapolis, where they resided for some time. During that time, they each were laid off three jobs—apiece! Finding themselves unemployed for the third time, they concluded that enough was enough and decided to buy a Mrs. Field’s Cookies franchise here in Phoenix. Shortly after arriving here (he said within two weeks), they realized that would never do. But they stuck with it for about three years until they managed to sell the business. At that time they had plenty in savings and figured they would just be retired people.

About that time they had a late-life kid, by choice. “Best decision I’ve ever made in my life,” says he.

Then the stock market crashed, so one of them needed to go back to work. He was more or less enticed into real estate by a friend; took the classes planning to go into commercial property sales and then, influenced by a particularly articulate instructor, decided to try residential sales instead.

He says he loves it (and he indeed seems to): says he’s never worked so hard in his life and never enjoyed a job so much.

The trick, we’re told, is to treat the enterprise as a business, not as some sort of part-time gig. He says you have to work at it full-time (or more), always be developing leads and prospects, always keep abreast of the changing market, and have a coherent, first-rate marketing strategy. He’s very good at marketing: that’s what he did for the huge corporations where he worked in management.

Now, here’s the kicker:

I asked, as subtly as I could, how much a person could expect to earn at real estate; then La Maya put the question more frankly.

He said that in your first year, if you’re working at it full-time, you can expect to gross $30,000 to $40,000, before expenses. After ten years, he’s making about 200 grand.

After sixteen years, La Maya is earning 33% of that, in a tenured position. Prorate that nine-month salary over twelve months, and you still end up with significantly less than half of JS’s take. Me? After ten years in academe, I was earning 33% of it over a twelve-month contract. Now I’m making $14,400 a year.

WTF!?!

As you can imagine, this got our attention.

La Maya now thinks she will take a year to enroll in the required courses on the side, get a license, and, if she can get away with it, begin slowly to build a following. This would put her in a good position to take off when she quits her GDU job in about five or six years.

I’m thinking it would be worth trying to get the license fairly quickly (possibly even paying a proprietary school for the courses, since the junior colleges don’t offer them in a timely manner). Then start building the business forthwith. Thirty grand doesn’t sound like much. But even if you had to fork over 40% of it in taxes and overhead, you’d still be left with a net $18,000.

The net on what I earn now ranges from $11, 520 to $13,440.

So…if JS is correct, even on the low end, first-year income would still net significantly more than I’m making now. An extra $4,560 would make a huge difference for me, to say nothing of an extra $6,480. It would mean the difference between scrabbling along, pinching every penny and not even being able to go to a movie or a concert, and living a fairly normal middle-class life.

Before this afternoon, I was wavering about the real estate class. It takes place on the evenings of the two days I teach, which means I get two Days from Hell each week, and I double my commute cost because I have to drive out to campus twice on each of my teaching days. I’ve wondered if the results would be worth it.

However, I now think it’s a good idea. I’m just gonna do it. It’s only five weeks. Then I’ve got to find the second course somewhere and take the ½-credit contracts seminar. Once I have those things in place, I’ll try to get a job as a flunky somewhere, carrying an experienced agent’s luggage. I’m not going to quit teaching until I see if I can succeed at this enterprise—I now have the classes down to such an art they don’t take much time to manage. But if 30 grand comes in the door during the first year, you can be sure I’ll never set foot in a classroom again.

Good-bye to the schoolhouse!

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Holly March 20, 2012 at 6:50 am

Best of luck to you, FAM! Sounds like an adventure — you certainly have the stick-to-itiveness to make it a success. Hopefully, you will wonder why you didn’t get into the biz sooner.

E. Murphy March 20, 2012 at 9:21 am

But just remember, any time you are in sales you will have to be a person who “suffers fools gladly.”

funny March 20, 2012 at 9:23 am

LOL! Ain’t that the truth. One of JS’s salient characteristics is an outward calm equanimity.

Jan March 24, 2012 at 8:23 pm

Wonderful—but I have three friends who have made hardly a penny in the last two years in your neck of the woods. Real Estate is a make it or break it industry. It is not about friendships–but clients and connections. I am betting (sorry to be a sour note) that JS is anxious to get your connections and work your people.
It is sales.
Be careful.

Funny about Money March 24, 2012 at 9:06 pm

@ Jan: Yeah, I wouldn’t be surprised at all but what you’re onto something there. It certainly isn’t an easy business, especially when you’re in one of the two or three hardest-hit states in the nation during a real estate bust.

And you surely are right about the “clients and connections” observation. The two people I know who seem to be doing well treat their enterprise as a business. They both work very hard at it, and they’re quite professional, as in they’re well organized, focused, skilled at marketing, and quietly persistent. I do know that in the past couple of years, one has done quite well in the short sale and foreclosure market and the other has succeeded by dint of working clients & connections nonstop.

It’s worth observing, though, that the real estate industry has other jobs than sales. This site lists a few alternatives: http://www.careers-in-finance.com/reoptions.htm

And since I need to earn so little, I’m open to the possibility of working as an admin in a real estate office — I’m very good at answering phones, pushing paper, filing, and wrangling websites.

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