I started my own real estate brokerage a few months ago. I was planning to start my own shop not to make a ton of money, but to have more control and save money over paying another broker. I make most of my money from flipping houses. Before starting a brokerage I talked to many other office owners about thier business and how they ran their office. I came to realize that not many of them make much money either. A lot of them started offices so they would not have to pay another broker as well on their own deals.
I looked at many scenarios on how to make money with a real estate brokerage. I could not come up with a structure I liked. I had to let good agents keep a lot of their commission to attract them to the office. I could attract new agents, but they would take much more training and may not produce. There did not seem to be a winning solution. Then I thought of something. Why am I so worried about the office making a ton of money when that was not my original goal or my bread and butter. I should be focussing on my core business.
How did I rethink my business model?
I thought how can I make the office help my core business? It was actually Nikki (my project manager) who came up with the idea; entice agents to find me deals. I could charge desk fees for agents which wouldnhelp with expenses and make me a little money. If the agents were able to get me a deal I could flip, I would wave 6 months of desk fees. I realized if an agent got me one deal, it would make me as much as 1.5 years of commission splits and desk fees from that agent.
I knew that was the answer to my problem. Use the agency to help my core business. Now i need to find some more agents and tell my current agents the new structure. https://investfourmore.com/2018/04/09/my-real-estate-brokerage-blue-steel-real-estate-is-open/