My business idea - am I nuts?

drm7

Hi all!  I`m new to this site so go easy.  I heard about it from a guest on Donny Deutsch`s show on CNBC.
I am a cube dweller for a Fortune 100 and I`m bored and sick of cube life.  I`m in the IT department.  My passion is real estate (buying, selling, fixing, building, etc).  I discovered this passion after buying my second home and learning to finish the basement on my own.  I framed, plumbed, wired, painted, tiled, etc a full basement.  This included a full bath, laundry room, two bedrooms, and a large family room.  I`ve since sold that home for a profit and hired a general contractor to build a custom home.  I`ve since finished the basement in this home along with some additional space in a side room.  We are currently trying to sell this home in order to relocate to start a business.
I`ve put a lot of thought in different real estate businesses (handyman, mortgage agent, Realtor, etc).  It seems to always come back to being a Realtor.  I am looking to do this in the southern part of CA.  I know, CA is getting hammered in the current RE environment.  But my thinking is that if I`m there in the bottom or hopefully near the bottom I`ll be best prepared for a more normal market should one come back.  Not the overheated market but a normal one where a home priced fairly will sell in a reasonable amount of time.  I plan to open my own brokerage with a twist.  Unfortunately I can`t give away my twist at this time.  I`ve been reading marketing books such as Duct Tape and I`m getting ready to start my business plan using the Palo Alto software.
I hope that my passion for RE, my plan to become the most knowledgeable agent out there, hard work, and my marketing twist will secure me a healthy spot in the already crowded CA RE market.  With the current home prices it is my estimate that 12-20 homes per year can secure me a nice income so that I can actually afford CA (taxes, housing, energy costs, etc) without renting for the rest of my life.  I also hope to attract a few top performers to join my firm once I`m off the launch pad.
Sorry for the long post but this is my intro and my idea.  Please let me know what you think about my plan and any insight you might have on the current RE crunch.

adamc

It if you have the money and the insight in picking a good area is the time to buy/re build a house. I personally would be doing it if I wasn`t 18 and only had 2600 in the bank. I just finished Think Big and Kick Ass by Donald Trump and I can say he has some interesting stories so you may think about picking that up on Amazon or something used for about 10 bucks.
 
Its good that you personally do the wiring ect not only does it save you money you know its done right and its a good when your pitching the property.
 
Best of luck

startuphelper

Hey drm7, go for it! I don`t normally say that so quickly, but I was a former cube dweller for a Fortune 100 company also and I feel your pain.
 
Hang on to that job while you get your realtors license and wait for the housing market to stabilize. We are currently going through a downturn, but it will turn around someday, and you will be ready to dive in. Good luck!

robertj

drm7,
I have a good friend who owned and operated a RE brokerage in SoCal for 15 years. As the licensed RE broker - he spent most of his time in the office, supporting and monitoring his sales agents. This left him virtually no time to do any personal sales. 
In residential RE there are two parties to the transaction, each usually represented by a RE agent. Although many folks think they can do both - the "successful" agents usually understand which side of the transaction is their "strong suit" and focus their energy on that.
My suggestion, is to get your feet wet in the business first. Be an agent for a broker. See what issues there are. Determine if you prefer being a sellers agent or a buyers agent. The experience will be a benefit when you open your own brokerage.

drm7

Thanks for the advice everyone.
Craig:  Can you elaborate more on what is happening in England?  I have been contemplating what type of market will emerge but just can`t imagine what it will be.  California allows someone with a four year degree to sit for the brokers exam.  I plan to work with closing firms, appraisers, inspectors, and anyone else that can give me "training" as to what goes on during a deal.
Robert:  I hope to start as a one man office concentrating on building my skills as a listing and selling agent.  I believe an agent should determine what their strong suit is and focus on that.    I understand many agents don`t like it when a broker works sales/listings too.  This is why I want to work alone at first.  I need to gain the skills necessary to help any future agents.  Who knows, if I do well enough I may stay a one man show.
Thanks again!
drm7

drm7

Craig:  that is one of my biggest fears.  That even borrowers with the slightest mark against them won`t qualify thus driving the housing market down even further.  The unsold inventory is very high.  People need to relocate for various reasons and when they can`t sell their home how will they be able to do it.  I do fear that we are still a ways from the bottom.  The market I want to work in is more affluent with higher home prices and incomes.  I`m starting research now to see if this type of market still works.  The more affluent folks are not as held back by credit/income issues.  For instance, I have some MLS reports, by zip code, on single family detached homes showing avg-days-on-market around 65 days for the year 2006 and around 70 days for the year 2007.  YTD through end of April 2008 shows DOM around 75.  I would be tickled pink if it only took 75 days to sell my home.  It has been listed for 14 months and we`ve dropped $90k on the asking price.  My market is severely down.  So even though the inventory is high in my target market it does appear that things are moving.
Any tips on additional research I can do for my target area?  I`m hoping that using great marketing techniques I can set myself apart and raise my name recognition.  It is my opinion that during the market boom most agents didn`t have to learn marketing to make money and now many are unprepared.  My wife is a former PR specialist in earned media.  She will be my parnter in this venture.

justryingtohelp

Not sure just thinking out loud here, but I know foreclosure rates are very high and banks hate sitting on all that inventory they are not equipped to manage.  Could you think of a way to work in real estate by helping banks manage this inventory?  Maybe auctions, rentals, fixing up and keeping an eye on the properties...

drm7

KJC,
All good points!  My main method to succeed in whatever venture I undertake will be a combination of hard work, knowledge, customer service and passion.  Failure is not an option.  Of course this doesn`t mean I won`t change course I just won`t fail.    I may have to adjust what I do but I won`t be going back to cube life.  The "twist" I mentioned is a theme I want to implement to help me gain market awareness.  I will use as much marketing as possible to gain recognition.  Without a theme it seems like it would be extremely hard to stand out.  There are 100`s or 1000`s of Realtors in SoCal.  I`ve reviewed so many Realtor pages here and there and they are just so lacking.  Nothing stands out or pulls you in.  I`m trying to formulate something that I can "market".
My relocation is a family choice.  We would be relocating even if I stayed in the corporate world.  But, since we are relocating we decided to make a clean break from the corporate life as well.  WTH, you only live once, right? 
Of course this may all change as an old friend of my wife`s as propositioned us with a partnership on a new venture that isn`t RE.  We are considering the offer.  Choice is good, right?