Here is a little-known fact:
90% of people who get their real estate license will flame out.
But all you have to do is sell houses, the uninformed say. And people want to buy houses.
Really, if real estate were that simple, everyone would do it.
The reality is most people aren’t cut out for sixty-hour workweeks and taking phone calls from clients at 11 P.M.
But Caleb Carlson is.
Together with his business partner, Carlson owns a real estate company in the Twin Cities that is a subsidiary of Coldwell Banker.
The duo has built a sustainable company, to the point that they are now adding other realtors to their team.
Achieving that success wasn’t simple, but then again, it was never supposed to be.
Years ago, Carlson was an undergrad at North Dakota State University trying to navigate his way through the uncertainty of his early twenties.
Like many young adults, passion was missing in his life, until one day he began reading a copy of Rich Dad Poor Dad by Robert Kiyosaki.
At that point, his mindset shifted.
“It got me thinking that I need to obtain assets, not liabilities,” Carlson says.
Back then, Carlson was paying a couple hundred dollars in rent every month. Even though he was a student with a low-paying job, buying a house quickly became his mission.
“I tried to get approved for a mortgage,” Carlson says, but the bank told him they would not give him a loan unless he had a co-signer.
He then turned to his father for assistance, and soon Carlson was approved to buy a four-bedroom property.
His entrepreneurial spirit still not sated, Carlson then rented out the home to his college buddies, even going so far as to add a fifth bedroom that did not meet code, just so he could make a little more money.
This ingenuity immediately reversed Carlson’s financial fortunes.
“I went from paying $200 per month to cash flowing $400 per month,” he says. “Friday nights were a good night around me. I was living good at that point.”
During the homebuying process, Carlson became so intrigued with how real estate worked that he wanted to drop out of college and immediately become a realtor.
Standing in the way of that plan was his parents, who implored Carlson to first earn his degree in case life as a real estate agent didn’t work out.
“I ended up getting my degree, but I don’t use it. It was more about the experience,” he says, adding that during the latter half of college he also met his future wife.
After graduation, Carlson and his future wife relocated to the Twin Cities.
“I had some connections here, so I knew starting my business wasn’t going to be hard,” he says.
Yet, early on clients were minimal and commission checks were scarce, so to generate income while he built his business, Carlson held a conventional job.
It helped that his wife was a nurse, giving the couple another consistent source of income as Carlson worked tirelessly to follow through on his real estate venture.
“I would reach out to forty people a day, every day when I was brand new,” he says. “That included strangers at open houses and cold calls.”
It took a few years, but finally the late nights and pangs of self-doubt were replaced with feelings of accomplishment and satisfaction as Carlson built his company to the point that it was self-sustainable.
“I reverse-engineered my business to where if I talked to 50 people, one of them would turn into a client. I knew if one client made me $5,000, and I wanted to make $50,000, I knew I then had to talk to 500 people that year,” he shares.
“That’s how I got started, and eventually I built up enough clients and enough business to where the real estate did its own thing, and it keeps pumping because I did a good job.”
As mentioned at the outset of this article, the real estate business is not a 9-5 gig, and in many ways, being a realtor means your phone is never really turned off.
“It’s nights and it’s weekends. You always have to be accessible,” Carlson says of the job requirements.
“A lot of realtors get clients, they service them, and then they don’t have clients anymore, so they have to go back to lead gen.”
To avoid stretches of inactivity, Carlson says it is imperative that realtors develop a system that not only will guide them through the slower months of the year, but also help them close more deals.
“Realtors really have to make sure that they’re ready for November, December, and January because not a lot of people buy houses then. Hopefully they have systems in place where they’re continuing to lead generate, whether it’s through Zillow or another platform,” he explains.
Having a solid system in place is also crucial for mental health, because in a profession this volatile, it is very easy for realtors to become overwhelmed with the long hours, reliance on commission checks, and the unpredictability of clients.
“People are normal until you’re arguing about $500,000. At that point you see people’s true colors and you really have to be able to manage personalities,” Carlson says, who emphasizes that in many cases, understanding the layout of a home is superseded by a realtor’s ability to connect with a client.
“A lot of people get into real estate because they like houses, but you really have to like and understand people.”
In the Twin Cities, this skill has never been more valuable, especially as home prices continue to skyrocket.
“Every year seems to be getting harder for buyers. We’re seeing the same type of home price appreciation that happened on the coasts, in Chicago, and in Colorado,” Carlson notes.
Industry leaders say that much of the current hysteria regarding home prices can be attributed to the small number of homes that are available, historically low interest rates, the COVID-19 pandemic, and perhaps surprisingly, a shortage of workers in the labor market.
“Young guys aren’t swinging hammers or becoming carpenters, plumbers, and electricians, so the cost of labor is extremely high,” says Carlson.
“It’s a perfect storm for crazy prices. Houses I sold last year, I could sell them again this year, with no changes to them, for $30,000-$50,000 more.”
The rampant increases in home prices have left many in the middle-class feeling discouraged, which is why Carlson is encouraging buyers to be patient and also understand that they likely will have to pay more for the house that they want.
Still, according to Carlson, there is hope amidst the soaring price tags and unrelenting stress that comes with being a buyer in a seller’s market.
“All the experts are saying the market is going to stabilize,” he says. “The reason I think that’s true is because of supply and demand. As long as demand stays high, the prices won’t come down, but they could stabilize.”
It should be noted that the frustration many homebuyers are feeling is not exclusive to the middle-class.
Carlson shares that he has affluent clients from California who want to move to Minnesota, but even they can’t find a suitable home, despite the fact that they’re willing to pay cash for properties priced as much as $700,000.
The market is simply that crazy.
“Quentin, it’s tough for you and me to understand because we think $700,000 is a lot of money. A lot of times my own perspective will cloud my judgement, but there is more money out there than I can fathom,” says Carlson, who then mentions that he is seeing fierce competition for homes all the way up to the $1 million mark.
In a market as turbulent as the current one, anything is possible, but no matter if you’re a Wall Street tycoon or a first-time homebuyer, Carlson recommends exercising as much composure as possible, among other things.
“Save as much money as you can, be as patient as you can, and shop. Then, if you’re working with a good real estate agent, eventually they will find something off-market or you will win something on the market,” he says.
“And work with a good professional. There are a lot of good real estate agents, but there are plenty of bad ones too.”
To ward off vulture-like realtors, Carlson suggests being as diligent as possible when selecting an agent, plus choosing someone who prioritizes your wants and needs as a homebuyer.
“Find someone who looks at you as a person, not as a commission check,” he advises. “Someone who doesn’t need you to buy a house in a month or even a year. They’re ready when you’re ready.”
“I’m also big on checking their reviews on Zillow and Google, and typically your friends and family know a good agent.”
As for Carlson, he has no plans on slowing down in the next decade as he continues to build a team of realtors, acquire more properties of his own, and hopefully establish more businesses.
“I’m a serial entrepreneur. A lot of people say that, but they’re really more of a serial side hustler. I actually try to build LLCs and businesses because if my wife and I eventually have kids, I can’t be showing houses on Friday night and all day Saturday,” he says.
“The goal is to keep being profitable and helping as many people as I can, and then also building horizontal income streams, meaning if I’m sleeping in bed horizontally, I’m still making money.”
Finally, even though the real estate business is intense and not for the ambition-deprived, the industry will always be on the lookout for the next hungry self-motivator who is looking for a rewarding career path.
For those intent on having a vocation in real estate, Carlson has a few sound pieces of advice.
“Read Rich Dad Poor Dad and then find a successful agent and ask if you can work for them, for cheap or for free. Learn the business from someone who is already doing it,” he says.
“There is a 90% failure rate if you get your real estate license. People pay thousands of dollars to go to school, so to me, go pay a couple thousand dollars to learn from Kris Lindahl or a stud in your market. Make their life easier and see if you like being a real estate agent.” QS
Looking for a home in the Twin Cities area?
Reach out to Caleb Carlson today by visiting his Zillow page!
Looking for a new book to read?
Pick up Quentin Super’s first novel, The Long Road North for just $13.95!
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