How To Properly Start A Real Estate Brokerage Business

If you want a flexible job with high earning potential that you can train and start working for within months, then a career in real estate is just for you! Real estate agents help people to buy, sell or lease houses or plots and are paid a commission or percentage of the sale price of each house bought or sold. Hence their earnings are unlimited. However, you do need to spend some time and money and follow the right steps on how to become a real estate brokerage. Read on to find out what these steps are.

Get Educated and Licensed

The first and most obvious step is to take a licensing class and give the real estate exams, both at the state and national level. Licensing qualifications are different for many states. Therefore you must check with the real estate commission of your state about these requirements before signing up for your training.

Decide on a Brokerage

Before completing your training course, you will need to contact a brokerage in order for you to practice as a real estate agent. Brokers have a substantial amount of experience and can advise you when it comes to working in the field, buying and selling houses. When considering a brokerage firm to work for, keep in mind its size and reputation, and the kind of training offered as these will be crucial to kick-starting your career. Take the opinions of your friends and family and check online as well so that you are able to make an informed decision. It’s very important to note how you structure your real estate business. You should always start with a budget:

Develop a Budget

Decide on startup fees, keeping in mind money to be spent on licensing courses, additional exams, business cards, advertising, and signboards, etc. Since the income for a real estate agent is not steady and is based on how many houses you sell or buy, you will also need to keep some money saved to get by for a few months. You should also be considering setting aside a budget for Zillow as a marketing means.

Start Marketing Your Brokerage

Now that you have a brokerage set up, how do you plan on selling real estate for your agents and your employees? At the end of the day, the more homes you can sell the more profitable your real estate brokerage would be. Companies like Tier 1 Real Estate РBristol CT Real Estate Brokerage, explains that they use tactics like search engine optimization, facebook marketing, and many other forms of marketing to get their homes sold for fast.

The Different Types of Real Estate Investors in Houston

Real Estate Investors


We discussed what real estate investors do and how they differ from real estate agents, but there are also different types of investors that play a role in the market. For this, we’re going to be talking mostly about the Houston market, since they are one of the largest when it comes to total number of real estate investors and events due to the size of the city (and of course recent events with Harvey).

The three different types of investors we’ll cover here are the wholesaler, the flipper, and the lender.

The Wholesaler

The wholesaler is someone that locates homeowners that are looking to sell their home quickly or just trying to get rid of a home that’s a burden for them. Wholesalers find their leads through various means, including bandit signs, direct mail, flyers, foreclosure / tax lien lists, Facebook ads, SEO, and referrals, among other things. Companies that do wholesaling are often referred to as a we buy houses company or a home buyer company. When a wholesaler finds a deal, they put the homeowner under a contract so that they can’t lose that home to a competitor. Then they will reach out into their network and find a buyer for the home. The buyer may be someone who’s looking to live in a home and purchase on the cheap, wants to buy and hold it for a long-term rental, or is looking to flip the home. Once a buyer is located, the wholesaler will essentially have what’s called an assignment fee, and this is what their fee is for locating the deal and pairing the buyer and seller together, usually ranging between $2,000 and $20,000, with outliers that can go a lot higher than that.

The Flipper

This is the most commonly noted investor. The flipper is someone who looks to buy a project home for a reduced price so that they can perform renovations or a remodel and put it back on the market for a profit. Generally, flippers find their leads through other means like bird dogs, their own marketing, or wholesalers, and will handle everything from there such as the closing of the home, the construction/remodel crew and performance, and then staging or working with a real estate agent who can find a buyer from the home now that it’s ready to go on the market. A flipper generally does not use a traditional mortgage since they don’t quite line up with what is needed in a cash deal, and also because bankers don’t quite like to invest in something they consider so risky. A flipper will have a list of lenders, hard money or private lenders, that they will go to in order to fund their projects. Choosing the lender depends on their preference in properties and the type of rates they are able to offer.

The Lender

The lender is someone who has a cash store which allows them to lend out for real estate projects. Sometimes this is in accessible cash, and sometimes it’s in an IRA that is real estate investment friendly. The lender is usually someone that had a previous REI role, either they were a wholesaler or flipper, or both, and eventually made enough to switch into lending if they felt like it was a better fit for them. When an investor looks into a deal, they generally don’t like anything where the purchase price is more than 70% of the after-repair-value. As long as that magical 70% number is met, the lender will be interested in the deal. The lender has to take great care in assessing a deal and trusting the person that they are working with. Each lender will also have their own preferences in what kind of deals they’d like to take on. Some prefer single family homes while others like apartment complexes or RV parks. It really depends on what they are most comfortable with, what their risk tolerance is, and where they feel the best bang for the buck lies based on their market research. Additionally, sometimes the lender will have difference conditions on the money — such as a % of profit as well as different forms of interest or points.


With these three major different types of real estate investors, it would be important to start learning what each of them do in detail and who the players are in your local market. In the Houston scene, most of them can be found at the various REIA or real estate events, usually on a bi-weekly or monthly basis. Having a network in the real estate investing world is the most important thing you can build.

The Difference Between a Real Estate Agent and Investor

real estate agent vs investor


It’s normal to go through a home transaction using real estate agents, a buyer agent and a seller agent. In a normal use case, a buyer is looking for a new home to live in, and a seller is looking to either relocate or flip the house for some profit. But there are other scenarios where homes may be bought and sold in more unusual cases, and that’s generally when a real estate investor is involved. You may have heard of investors but aren’t entirely sure what they do. Let’s see if we can help clear that up.

The Traditional Process

A normal real estate transaction looks like this:

  1. A homeowner wants to sell their home, so they begin making any repairs or cosmetic improvements they feel will raise the resale value
  2. Homeowner contacts a listing agent who will then begin the process of staging and taking photographs of a property in order to list it on the local MLS
  3. A buyer enlists the aid of an agent to locate a home for them that matches certain criteria based on location and specs
  4. The home has multiple showings where buyers are scheduled to come check out the house. Sometimes there are multiple interested buyers, and that leads to a bidding war.
  5. After the bidding, negotiations begin to take place where the buyer tries to lower the cost of the house by leveraging inspection details
  6. The buyer also goes through a mortgage approval process so they can secure financing for the home
  7. After the negotiation and approval, the seller and buyer must agree to some terms like closing costs or deductions for certain things, and meet at a Title company to make the transaction legitimate
  8. Then they pay the real estate agents their dues (usually at closing) of about 3% each.

This process alone can take anywhere from 4-12 weeks in a normal scenario, but it can last over a year when the home does not match criteria that’s high in demand.

Where Investors Fit In

For most homeowners, the agent’s process is typical and will work just fine. But for some others that are in financial or similar stress, that process will take far too long. Homeowners that are in financial stress due to income reduction or medical bills begin falling behind on their mortgage payments. Once they receive a notice of foreclosure, they have to come up with the entire sum of money before their home gets auctioned off, leaving them with nothing. A traditional sales process in most cases will not allow them to sell the house in time, and if they’re already behind on the mortgage then they won’t be able to make the necessary repairs.

Other homeowners deal with things like water or fire damage, vacancy, inheritance, or Simply need to relocate very quickly. Similar to foreclosure issues, they’re under a tight timeline and can’t go through the normal MLS process. In either of these scenarios, a real estate investor can step in and assist in the sale of the home.

While there are multiple types of investors, they’ll all generally perform the same thing as far as the existing homeowner is concerned. Rather than looking for financing, they usually have their own investment funds or they have a private lender who’s willing to lend cash. The investor will assess the property and offer a cash value, generally below market price, but it’s in cash and it’s quick. The investor pays closing costs, doesn’t require the homeowner to make any repairs (they can purchase it as-is), and they can generally close within 7 days, which is usually within a timeline that the homeowner desperately needs.

Do You Need To Sell Quickly?

If you’re one of the homeowners who is in a tight situation and need to sell the home quickly, check out what a Houston home buyer can do for you. We’ve written about investors before, and we know the importance of getting out from under the bridge when it comes to a home mortgage. Don’t wait! Letting it sit until the last moment can do a lot more harm than good, and there’s still a way out.

For more information on investment or home care tips, check out some of our other blog content (


What If The House Isn’t Worth Repairing

Sometimes as a homeowner we need to evaluate when it’s just not worth putting more money into a property. If a home ends up becoming more of a burden, we want to just get rid of it somehow. Going through the MLS and negotiating with buyers could be a nightmare if they’re going to try and take advantage of things that need fixing. In those cases, it’s a lot easier to just use a real estate investor.

To learn about selling to a real estate investor, check out this video: You can also check out the channel at

What To Do After The Cleaning


One of the natural steps when dealing with real estate is selling a property. In many cases, most know that if you work on the home a little bit, you may get substantial financial returns in the sale. In some cases, this is viable, but in others it’s not much of an option, depending on the financial status of the homeowner or state of disrepair the property is in.

One thing for sure is that you will generally get more for your property if it at least looks clean. If the carpet is in decent shape, a good cleaning will make the home look cleaner and thus give it the appeal of higher value. At that point, you may decide to sell through a real estate agent and traditional means, but if you’re looking for a faster route or there’s too much work to sell it to the general market, you might consider a real estate investor who will give you cash for the home while also closing much more quickly than standard real estate deals.

Check out the benefits of selling to a real estate investor if this is new to you.