Is a real estate brokerage franchise a good investment? Today we explore a low cost real estate franchise that is that has unique positioning in the market.
Good opportunity today with a franchise that we like for a number of reasons. This franchise qualifies for our partner program, so for qualified candidates who are lacking start-up capital, we will invest up to 50% of your start-up costs in exchange for 50% of the profits. You can learn more about the partner program at the end of this video. Let’s take a look at the franchise and why I think they are well suited for this economy.
The real estate broker business model is simple, you open an office, you recruit brokers, they sell houses, and as the owner, you retain a portion of every house they sell. Commissions are a percentage of the selling price of a house so they can be quite significant.
There are many ways to make money in Real Estate, buying the real estate itself, managing properties, or becoming a Realtor. In a market that goes up – buying and speculating in real estate makes sense. But when the economy slows, many people will have to sell their homes. In these markets, it can make sense to be selling properties. Just think about when the economy slows down you will have thousands of houses on the market that need to be sold. Companies that have better digital marketing and promotional programs in place will offer better value.
Now here is the problem I see in the market and why I wasnt interested in other real estate franchises. Back when I was an active real estate investor, I stopped using agents because of having to pay 6% on each sale. That’s $60,000 commission on a million-dollar house that takes the agent 4 days to sell in a hot market. Now way back in the stone age 6% made sense because you had to advertise on billboards, in the newspaper, it cost money and took time to find a buyer. Today it just doesn’t cost as much so many people are reluctant to pay that fee. Other options have popped up like FSBO and online listing sites, but most sellers are unwilling to handle the transaction themselves. In fact 91% of sellers still prefer to work with a Real Estate agent.
So this franchise does everything that a traditional real estate agent does, but they do it for half the fee. Their model is is tech-driven, paperless and focuses on digital marketing. So in a down market, they are helping sellers to market and sell their home using modern methods, as well as the traditional MLS listing. The seller pays half of what they would have with a typical agent while getting exactly the same service. What is also very appealing about this franchise is the fact that on average, franchisees have seen a return on investment back as little as in 120 days. Please see the FDD for complete details.
Now most real estate franchises require you to have a brokers license, which if you arent already a licensed agent, will take at least 2 years. This franchise does not require that, you don’t even need to be a real estate agent, we’ll cover how that works with qualified candidates. Other real estate franchises you need an office which can be costly at startup, This franchise because it is mostly digital can be started from a home or small office. Most Real Estate brokerage franchise will cost between $100-$250,000. This franchise costs as low as $36,000 plus some working capital to get your business started. And keep in mind there are a lot of financing programs from the government available now that as of the date of filming are providing incentives like 6 months no payments and those payments are forgiven! So its a great time to start a business your franchise city broker can help you learn more about the financing programs in place.
As with any franchise, your success or failure will depend on your business skills and motivation. The people who will do well in this franchise are savvy business candidates, real estate experience is beneficial, but not essential. More importantly, you should have previous management or executive experience as you will be recruiting agents, networking in your community, developing relationships and all aspects related to running a business. You will also need a minimum net worth of $45,000 to qualify.
This franchise is currently not available in all states, and they are pretty well sold out in most of Canada, a few provinces like BC still have some availability. If you are a qualified candidate and would like to see if your territory is available, you can contact your franchise city broker by clicking the link above, or in the description box.If you lack the complete investment details on our partner program here https://www.franchise.city/partner-program If you need help finding or researching a franchise, our services are always free. please like and subscribe and thanks for watching