I am looking to open my own brokerage in the future. I have 8 years of real estate experience, working in a smaller office. My question is, how much reserve funds should one have available before they make the plunge? I feel I am very ready to break away from my office and create my own path. Since I am very conservative, the fear of failure always haunts the back of my mind eventhough it would probably be a success within time. I am very active within my association, and feel that my friendly personality with the public and with fellow realtors, will only bennefit me when I start to recruit a strong team. Over the years, I have learned more of how a company should not be run, just by watching the careless mistakes of my current Broker and the decisions she makes. Real Estate is in my blood, and I am here for the long haul. The question is, am I ready to break away and go on my own, and can I afford to take the biggest step yet in my real estate career? Any suggestions are greatly appreciated!

You can break off on your own in a way that fits your budget.

For instance, I am planning on opening my own office later this year. Initially, I am going to offer a virtual office to my agents, so I will have to stick with agents that are at least a little tech saavy or willing to let me train them in using the tools I will have available.

However, there are some general expenses that your going to have to deal with. You need to consider the amount to incorporate, errors and omissions insurance, initial costs for signs, letterhead, etc.

My plan is to obtain a brick and mortar office once income has reached a certain level - I anticipate that level being reached when I have 6 full time agents.

R

Where will you meet w/buyers?

From what I'm reading online, a lot of virtual office agents meet with buyers either in their homes, or at internet cafes and the like.

Our office doesn't get a whole lot of walk in's, and many times, the agents meet with the buyers outside of the office. Our sales last year were nearly 50% more than than the previous year (actually between 40 and 50%).

For what it's worth. LOL

I've heard that you should have 2 years of reserve funds set aside when starting any business. Do you think that applies when starting a brokerage, or should I plan on setting more or less aside? I have considered the virtual office however, I am concerned it could make it more difficult to recruit agents. We are an area of brick and mortar offices, and I'm afraid I would not be taken as seriously because it is not the norm in my area. Thanks for your thoughts!

I would be willing to bet that there are many sucessful agents in your area that rarely if ever set foot in the office. Most have everything they need in their home offices from a laser printer to high-speed internet. If you provide virtual office access to everything an agent needs then you should be fine.

Starbucks is a great place to meet a client or perhaps you can arrange to make occassional use of your attorney's conference room if it is available.

I am planning to get my Brokers by July.

After I close my next listing (1.9m) I could break away from
my Broker and go out on my own with absolutely no fear.

However, my current spit is 93% (as of November)...soooo,
what is my incentive to leave my current Brokerage? Mostly
ego at this point.

Bottom line. If you've been an agent for 8 years (4yrs here)
it seems you should be at a very decent split with no need to
break away.
T