How being a realtor and investor made me better at business

It’s a bit odd, I must admit.  Those things aren’t really tied together, I mean, sure there is tech in #realty (some) and in investments (more) but they aren’t usually conduits to becoming better at tech – so what gives?

Getting started in real estate

My start in #real estate was totally by chance.  I was a mere 19 year old and after 2 years of renting near my university’s campus, was about to embark on yet another search for an apartment.  At this point, my mother asked if I would want to own and manage a property.

Seeing as I am not one to say no to opportunity, I took the loan from my parents, found myself a nice bungalow (with a huge 3-bedroom basement) and bought it.

Just before closing, my realtor and lawyer called me up to let me know that the garage had been burned down (under super weird circumstance – where the current owners were smoking meat in there) and had to be rebuilt.  This would happen just before I moved in, so it was almost of no consequence for me and I got a new garage.

With all that out of the way, I could now focus on, well work I guess.

Investment bug hits

It wasn’t very long until the investment bug hit and I decided that the math made a lot of sense for owning several properties. With that itch to scratch and with being a night owl, I came across a compelling infomercial one night and decided to go to the “Free, Live information session”.  I won’t mention who the program was run by, as I do not feel that these guys actually do a good job of growing their students anyway (it’s just a cash grab), but it really opened my 20 year old eyes to the realm of (real estate) possibility.

Commissions, contracts, showings, open houses

Now that I had a side hustle I started to make as many connections as I could in the real estate game.  As a novice to it, my entry point was to contact every single realtor I could find (this was still before Google existed, so there was a lot of actual work to be done to find them) and try to strike up favourable deals with them.

I found one!  That’s right – just one single realtor who had the wherewithal to work with me as an investor.

That actually goes to speak of how protectionist most realtors are of their commissions than anything else.  It’s quite funny actually – they’re willing to pay a ton for lead generation or even referrals but weren’t willing to discount their commissions on multiple deals.  The math apparently escaped them.

Deals 1, 2, …

With that one realtor helping me, we did deals.  Not a ton of them, but enough to keep her happy with our arrangement and keep me acquiring properties.

As time went on, I saw that the software they were using was 100% online at this point and that the contracts were all standardized.  I was already doing the majority of the work and really only needed a realtor to sign the final documents and put my money into escrow (Trust).

Why not just cut out the realtor (middle-man) and cut out the commissions then?

Real estate salesperson

That made a lot of sense to me.  I was not going to focus on realty full-time, but I did want to save the 2.5% that I was overpaying to acquire real estate and the 2.5% at disposition.  That much of a savings impacted the bottom line so much that it made for easier deals every time and the money made much more sense.

So I became a licensed realtor, something that took a mere six (6) weeks of “#education” and three (3) exams.  I did it part-time and in total it took 2 months and cost around $1500 prior to membership dues, insurance, etc…

Sales, Marketing, Financials

As part of the curriculum of becoming a realtor, you are given an option to take a few #courses that are aimed at making you a better salesperson, marketer and investor. These courses exist for the most part because people often fail to realize that being a realtor is very much the same as running a #business, especially if you are part of a discount #brokerage where you have to handle absolutely everything.  Ontario’s realtor curriculum has the following courses which are aimed at helping its paying members (and students) to become knowledgeable of the bare minimums:

The parts of the left are all mandatory and I believe that most students (likely more than two-thirds) actually opt for The Residential Real Estate Transaction during the Initial Salesperson Registration phase and only complete The Commercial Real Estate Transaction during the Renewal of Salesperson Registration phase later on. This is likely because most realtors come out to a residential, rather than commercial practice (or brokerage).

It’s as part of these courses and electives that you start to get some schooling on the Sales, Marketing and Financials of running a business and it’s here that you often get a launch off point to understanding these better (if you’re inquisitive and follow up on the basics with further reading, as I have).

The courses themselves

Here is a basic overview of the courses that mattered with a little commentary as to why:

Real Estate as a Professional Career

This course is light on the sales and marketing, but talks a lot about running your own business / practice – as you’ll likely end up as an independent contractor once you’ve completed the registration.

Land Structures and Real Estate Trading

This course is likely to teach an registrant about the importance that government plays in a trade and how to think the governing acts, by-laws, ordinances and laws surrounding the trade of real estate.

The Real Estate Transaction (series)

This series of courses educates people on the documents, documentation, due diligence, pricing, etc… for a real estate transaction.  There are a lot of forms and as they are very important, these 100+ hours are mostly dedicated to practicing filling them out properly so that you are on the right side of the law.  Attention to detail is key here.

The final of these three courses then brings up the more important (and generally relevant) material.  It is all about commercial real estate which most often means investment vehicles, sales of businesses, #valuation and leasing.

Real Property Law

As you might guess, this is all about the law and the manner in which trades must occur in order to lawful.  This course covers many possible vehicles for ownership, contracts and/or types of engagements that one might have with their property, business and/or lease.

The electives

Beyond the above (i.e the basics), there are several other courses offered, of which some must be taken.  All of these give you a new lens with which to look at property ownership and trade and introduce a few new mathematical theories and/or concepts which are applicable elsewhere.

The (almost) MBA

As part of most of the above and then with the added courses required to also become a broker (show below), you will have taken a huge amount of courses tailored to make you able to be in business, value other businesses, sell businesses, run sales and marketing campaigns, know about the law, ordinances, by-laws and understand #financial statements.

All of this is very light, however part of this education for me was about starting down a path where I understood this stuff better and knew it existed, and then continue on with my own learning about the topics that interested me the most.

Conclusion

Sure it isn’t a real #MBA by any means, it definitely does not connect you with the like-minded leaders of tomorrow that will further your career or help you in M&A down the road.  What it does do is set the foundation for the things you require to run a business, understand whether it’s valuable and then sell that business off.  All of the law, practices, metrics, due diligence and frameworks are there in the material if you’re just willing to pay attention (and extend yourself slightly in your own time).

With this education backing me, and with lots and lots of experience in the past I have been able to turn into a much more informed and knowledgeable technologist, executive and business owner.  Oh – and I can sell your house, building or business as well!