hello all

i currently have my license as a salesperson but i have 3 courses left if i wanted to pursue a broker's license

i currently have my own investment LLC and im curious on how to start a brokerage?
what kind of capital do you need up front?
would it be better to buy a franchise?
what about a brokerage that does mortgages and real estate?
what kind of licenses would you need?
what was your process from A - Z?
was it intensive or easy to set up?

if i were to start one, it would only cater to investors and using seller financing techniques(rent to own) programs

i would only recruit investor agents and probably be a discount model to dispose properties quickly

again im just curious - not serious

I've actually been thinking about writing a course on the subject.

I own a mortgage brokerage (started it a little over a year ago) I probably wouldn't of if I knew how long it would take and the amount that I just didn't know getting into it. Still screwing around with websites and sometimes I feel more like a babysitter then a business man. Admittedly, I'm not well versed in the Real Estate side, but I can't imagine its more difficult then the mortgage side.

I suggest you find someone that is willing to mentor you...at least through the initial setup phase.

Or...if you can afford it. Find a business broker a buy an existing brokerage, then trim the fat.

Your questions are specific, but not specific enough.

capital - depends on the office you'd like to rent? Also, have access to as much money as you possibly can and don't part with it quickly because stupid things always seem to come up.
better to buy a franchise - there's vast arguments for both sides of this. If I had to start a RE franchise, I'd choose Keller Williams.
both mortgage & real estate - no way, just give me a call and I'll handle your mortgages..jk. Mortgages are a different beast then RE. It wouldn't be too difficult once licensed as a RE broker to add 1 or 2 experienced in house LOs and then slowly expand.
my A-Z process - get broker's license while researching offices and insurance. Also, no one has ever taught us how to recruit agents beyond placing a classified ads. I'd budget for a mighty head hunter personally.
setup...easy? not for me - but the 1st time is always the most difficult. And, I was stupid enough to believe I could do it without consulting people who had done it before.

I hope that helps!

First, let me say that I am NOT a "been there.. done that" guy on this subject.

I have studied, asked questions, talked to brokers who have done it, but I do not have actual hands on field experience in creating a brokerage. Just up on the theory.

I plan on opening my own brokerage next year.

Having said that, I have been an agent in a brokerage that tended toward what you sound like you want to do.

For the market your talking about, I don't see a huge need to get a franchise. What your doing is much more closely related to being a VC firm than a broker (at least on the front end). Much of it is word of mouth and having existing relationships within the local investor community. Having said that, you usually need to build a brokerage of this type on an existing clientele that you have been servicing as an agent.

In my case, I signed on with a brokerage that was a bit too split. They wanted to do both general residential and investors with too few resources. They ultimately failed, in my opinion because of this lack of focus. For my part, I had been very strong in the residential side and saw the move as a chance for me to gain knowledge in the investor space.

If they had remained focused on the investor angle, I think they would have done better. The other problem was their focus on overseas investors. Almost all the clients were from Hong Kong. They should have leveraged off the overseas investment, broadened their domestic investor appeal and stayed focused on that. Instead, they went back and forth between pushing the investor and residential side. One piece of advice I would give you is, gain some knowledge on the commercial side. Your other posts make it sound like your pretty interested in that angle already, but make sure you include it in your business plan. Your going to likely make more for your brokerage in the commercial investment space than you think.

There are plenty of brokerages out there that have in-house mortgage folks as well. For my money, the biggest bang for the buck would be to bring in a already seasoned manager for the mortgage side. However, I don't think I would do this right out of the gate. Get your investor services some momentum first. When you do start thinking seriously about bringing some mortgage services in-house, your going to want to find someone well versed in financial vehicles that are more in demand to investors. Maybe even someone who has relationships with real estate based VC firms.

From a general brokerage standpoint, you should plan on having operating funds for a year to 18 months. Your setup costs can range from very little to a boatload of money. This depends on whether or not your going to get an executive suite somewhere or a retail space with sidewalk space. Are you going to go all out on decorating your offices with high end appeal? Full time secretaries/receptionists?

If you want to get business loans for any of this, your going to have to put together a strong business plan to show the bankers.

I have ready your other posts on the site and I don't think you are going to find setting up a brokerage as much of a challenge. You can probably work through the same folks who set up your existing LLC and just let them know your doing a real estate brokerage and they can get most of the work done for you. Then just consult the California DRE site on what your responsabilities are as a broker ( http://www.dre.ca.gov/licensees_sub.htm ), they have tons of resources there for you to check out.

It's all pretty straight forward.

R