In today's interview I sit down with Sterling Holmes, a sports radio host who also sold $13 million dollars worth of real estate last year part time. Sterling explains the pros and cons to doing this and drops some amazing value on the right way to get into real estate if it's something you've been considering for your Caffeinated Hustle.
Grab your drink and get ready. This is the caffeinated hustle. The best place to learn about entrepreneurs and FTS and life expert advice and guest interviews to launch your business and NFT journey further than you ever imagined. Now, here's your host, entrepreneur, coffee fanatic and founder of the NFT project, caffeinated creatures, Ben Carson. Welcome back to the caffeinated hustle. I'm your host, Ben Carson. thanks for stopping by. Let's drop some value on your day. All right, team today, we've got Sterling homes with us. He is a phenomenal entrepreneur who part time last year with his team has sold about $13 million with a real estate. And he's not even trying just whatever he's going to tell you just remember he's humble, but he's not trying. It's just it comes easy to him. He's a natural. So Sterling, welcome to the show. Dude, I'm trying so hard. You have no idea how many cups of coffee it takes just for me to get through the day. I mean, that's why you're perfect fit for this show, man. It's gonna be a blast today. I have no doubt the caffeinated hustle is it's like my mantra right here. Didn't even didn't even know that you jacked my mantra. Ben, how dare you? Well just get a tattooed and just give us a shout out on Twitter. That's what that's the entire purpose of the show. Just give us that clout we need. So all right, man, we're just gonna dive right into it. Because if I hear side hustle, if I hear entrepreneur, like one of the first things to come to my mind that makes a lot of money is real estate. And I think that's such a an easy trap to get into. Because you might make it sound easy, but I bet it's not even close. So ballpark top of your head. What do you think like the number of new agents that show up in a year is versus how many are still there at the end of the year? I don't know. You're not gonna know how many show up. But I'm looking for failure rates. That's what I really like to get out here. I mean, the bust rate is very high. If you're a sports person, say you get drafted, the bust rate of those 45. Dudes drafted is very high, right? Same thing. In real estate. I forget what the exact number is. It's something like 20% of the real estate agents do 80% of the volume. It just goes to show the top agents, they have a I don't wanna say a stranglehold. But they have a good base, because people trust them. They're out in the community, they're doing a lot of work. If you're just doing it part time, it's very easy to say, well, if I sell this house, let's just say it's a $300,000. House, I'll get $9,000 in commission, right? But whose house are you selling? Are you getting that listing? Or as someone else who does a lot more volume that a lot of people in the community trust? Are they getting that listing? Are you bringing the buyers, it's not as easy to say, Well, my friend might want to buy a house, it's not that easy. It has to be a situation where if you're not doing it full time, you have to have a team in place that you trust that you know, if you're gone if you're doing one of your other side hustles that you can rely on them. And that's what it comes down to is who building a team. It can't just be one person doing it part time. It's, it's not that easy. Okay, so you're doing a part time? What are you doing the other part of your time? What what's the reason you're not going after a full time. So I do sports, talk radio, I do radio, I have a podcast as well. But my mom has been selling real estate and she was actually doing it on the side as well when she was doing radio back in the day. But she has been doing real estate in Kansas City since 2005. She's sold real estate in Indiana since she was 18. So this has been part of her lifeblood, if you will, basically your entire life, my grandpa's like that Henryville or Indiana real estate Hall of Fame, which I didn't even know they had that who would have thought as a real estate Hall of Fame. Couldn't be a fake plaque. Okay, grandpa, Jimmy, I'm pumped the brakes there. But she is someone who works extremely hard. It's not just a nine to five. If you're doing other jobs, you got to work on the weekends, you have to work on the weekends, you have to show until 9pm. If you're showing someone a house, when do they work, nine to five, they're not gonna be looking at a house, they want to go after their work stuff. So when you're an agent, you go well, I want nine to five, like the flexibility, you have to be flexible for your buyers for your sellers, not just for yourself, but for everyone else involved. And again, it works for me because I have someone who's been a pillar in Kansas City in the real estate community for so long. Without her, I would have been lost. I'm an extremely outgoing person. Ben, you've known me a long time extremely extroverted, right? Absolutely. But it's not just that simple. It's not just as simple as saying, I'm going to get this done. I'm going to do it. It comes down to having a plan in place. And it's much easier when you have someone who who knows the value of homes. It's not I can't just go to someone and say, let me let me buy your house. Let me sell your house. It does not work like that. You have to have the end you have to have a connection. And without my mom this would have been just a miserable ability to get started in this business. That's a great point because if you don't have a connection, like like you did, let's just knock this out right now though, just because you have the connection didn't mean you had it easy. You still had to get your license, you still have to be an outgoing person, you still have to put in all the time. You had a connection. It didn't mean you had guaranteed success. Your mom's not giving you anything. She's just giving you access to make it happen. Correct? Correct. Correct. So basically, I joined her as a team so we were doing so much business when COVID hit right COVID hit I was at a radio for a while because all the sponsors left because all the beer sponsors all the bars, whatever you hear on the radio, well, they have no money, no money for sponsors. So I was on a hiatus for a while ago, you know, I'm going to do, I'm not going to I'm gonna sit here. I'm going to find a way to make money i My mom was doing so much business she was swamped with the real estate market was gonna crash. In fact, it's exact opposite it just boom, she needed someone to help her out. She can't show six houses at once. She needs someone to join her. I joined did a lot of the paperwork started off that way showing homes doing stuff on the weekend. Sometimes Yeah, it's not fun driving 45 minutes to liberty. Sometimes it's not fun driving an hour south to mountain City, Kansas. Like, it's not just your selling million dollar homes in Leawood. If you want to be successful, you have to go out, find the tuner $1,000 home that's need some work, it's a fixer upper. But that one, two and $1,000 home that you sell, it could lead to three others, maybe they have friends that are willing to sell, it's a snowball effect. But again, you've had to work extremely hard during all of this, it was not just my mom gave me things, it was a situation of I needed her to get my foot in the door. And once you get your foot in the door, that's when it really starts to take off. Yeah, I think that's very well said. Because even if you don't have a connection, I know there's always going to be real estate in places hiring. I mean, if you have a work ethic, you could probably get into this in some fashion. But I'm really thankful you're coming on the show, because there's a positive and a negative side to doing any sort of real estate on the side. And so first, you know, the positive, you know, everyone sees real estate agents, especially in this market lately, it sounds like just a dream come true. But I mean, you're giving up all of your time, all of your extra energy, it is a full time commitment, even for only doing it a few hours a week. So I really appreciate how you said that. So let's say someone's starting to listen to this, they're still very interested in doing this. How is the process? Do you go to college to become a real estate agent? Can anyone just go after if they're willing to put in some work? How does it start? If you can put in the work? What I did was, again, on my hiatus from from radio, I looked up how to get my license. It's not that difficult. Okay, it truly is not that hard. You have to take some tests, you have to take some classes beforehand. There's a long little process, I guess, right? You have to take these online classes, sometimes you have to go in person during COVID, they were doing no one person. So but I did mine all online, they need to take the test test is not too bad. Truthfully, it's not. It's, I believe 70% in in Missouri to pet to get your Missouri license. And I want to say 90% in Kansas to get your Kansas last license when you have to take the test. So it's not horrible. It's not like you have to know all these crazy things. Not too bad just takes time and a little bit of startup capital it does. It's not it's not extremely cheap. And then from there, I highly recommend joining a brick and mortar real estate company. That's gonna sound weird, because I'm no longer with a brick and mortar real estate company I now work with. I don't know if we want to put names out here, but I do with one that's more predominately online. Okay, because I was realizing, realistically, I was spending so much money on paying the people in the brick and mortars, you're paying for the rent, right? You're paying for all those people that work and that and the higher ups in the in the in the offices, you're paying for that. So that comes out of your paycheck? Well, if you're an experienced real estate agent, you don't need that. We can do the paperwork ourselves in the backend. Okay, we can do all of that stuff. We don't have to work in an office. We hardly ever met clients in the brick and mortar office, you meet him at Starbucks, you meet him at the house, you meet them at their house, there's a lot of ways to to meet clients besides the office. So the office, it seemed nice, that was a traditional way of doing real estate. And I will say if you are getting started, I think you need that. If you did try to just start off online, you will be lost, you will be confused. It would be extremely difficult. But I think once you get your footing, once you know what you are doing, once you understand everything there is to know I mean, you're always you're always learning you're always improving and getting better. But once you get the basis then I think it's easier to transition into a more online cloud based service or real estate brokerage. So that'd be my advice is still starting out. I think there is value in the traditional brick and mortar brokerage. That's very interesting. I love the fact that you're meeting people everywhere. You're basically just, of course, you know, you're a real estate agent. You're you're trying to help them sell but it's a it's a different type of salesmanship because you're having to sort of inner racked with a person, it's not so much just about their needs and their wants, it's about their personality. So you get really good at being a people person and you are already an extrovert for sure. But do you feel like personality skill set like a being empathetic, being able to understand who this person is to the core is a very important part of this. Or if you're just in it for the money, even if it's not going to be a long term goal, can you just grind your way through it, just try and make some money to move on to something else, it's really tough. It's really tough. If you think you can just grind through it, you have to understand, again, like you said, what the people want, but you have to also connect on a personal level with these people. There are a lot of options. There are tons of real estate agents out there. Okay, tons. So you have to connect with these people for, for example, when we just we just got my mom and myself, we went in there, we met with the person, they were interviewing for different people. But you have to connect with them on a certain level, even if all the numbers are the same. But it doesn't just come down to dollars and cents it comes down to what can we do for them? What can we add? What's the value we can give them? And also how do we connect with them? I don't want to work with someone who I think is a bad dude. Okay, it's gonna say a different word. But I'm not P G over here. P G, A, B, C, you know, I don't want to work with someone I don't get along. Yeah. So you have to understand that if someone wants to go through something quick, if they're just about the numbers, you have to get that don't joke around. If someone's very light hearted, and you have to have 45 minute conversations, talking about their dog, have that 45 minute conversation talking about their dog. That's what they want to do. Okay, so each person is different. And you have to connect and feel that early on in the process, and you have to sometimes adapt like a chameleon, right? To their specific personality. That's, that's very well said, Yeah, this definitely seems like a skill set, you could take almost anywhere. So that's kind of awesome. Because we're on the on the topic of people. I mean, you've done this now since COVID. So we're pushing you know, 12 to 18 months, probably you've been in this space, tell me somebody that stands out to you, like, don't give me any specifics of names like that. But like, like, what was just a unique experience you had that you just would not have had in any other profession, man that's tough, is I guess a few that are interesting. Some people buying from at a state, that's always an interesting one, without ever seeing the property, never seen a property, we got a couple. Sometimes they love it, sometimes. They don't. And it's an interesting conversation. Because you always want to be completely truthful, like you're showing them you're FaceTiming them, they see all the pictures, but sometimes they get there, they're just like, you know, maybe this is more work than we thought maybe this was better the other, but in the end, the end of every single one of the ones that didn't fall in love right away, they all ended up like texting us a week or two later. And you know what, this was the right decision. In this market. I think one of the craziest things has been, we work with a lot of investors. And we are sometimes telling them, you're putting too much money, you're trying to buy this too high, you will not make a profit on this. Like we're looking at the comps, we don't know if there's any chance of you making money. And they're the ones being more aggressive than us. And that's what's a weird thing to see in this current market is investors who are in it to make money right there and to flip the house. And we're saying, I don't know, guys, you might want to pump the brakes on this one, even though we get paid if we sell it right. I think honesty and transparency is huge in this business, especially when it comes to I'd say everyone but investors because they will not use you again, if you burn them. If you're in it just to make a quick buck. If you get that one and you're in you're in, you're out, you will never do business with him again. If you're transparent and say, we don't think you can make money on this house, or we don't think you can flip this the the profit margin is not there. They respect that that's something that you want to you want to have you want to have the transparency, the honesty, and the ability to say I'm not in this just to make money. I'm in this to actually help people. I'm in this to have a long term relationship with these people, whether it's business, personal, lifelong. I mean, we went and got lunch with a lot of our investors just for fun, not talking business. But just because we want to grab some lunch. Absolutely. So that happens. So you gotta be decent sales. You got to understand people, you know, it's not about the money. But I mean, be foolish not to talk about the money on on a podcast like this. So let's walk through a hypothetical because, you know, I've heard lots of people say, you know, like real estate's just you can't beat it. And so I think they're not understanding the full picture. So let's talk about this for a second. Let's say you sell, let's just make easy math. Let's just make it a million dollar home. That way we can just say I'm assuming, is it 7%? What's the average take out for a real estate portion? So 6% is the average right? 6%. And if 3% to each side, 3% to the selling side 3% to the buying side. A lot of times on a million dollar home, you're probably not getting that 6% you're probably getting something more like like five so two and a half Two and a half, not always, six 6% is the typical going rate, right? But when you get to a certain price, it becomes an astronomical commission amount, and you don't want to be that person. And in this market especially, there's so many people who are cutting corners is not good. You hate to see it, because, again, we think we are worth what the what we give the services we provide, we believe are worth that 3%. Again, up to a certain number. Okay, okay. But we think we're worth it. So when so when other agents are cutting corners and saying, Well, we'll do it for 2%, you're driving down the entire market. And we're seeing that a lot in this market, it's really tough. And eventually, I don't think that 6% in general is going to hold, they'll eventually have to probably go to a new model, you'll have to adapt to hell, their places around the country. Some people are suing because I thought it was collusion to get that 6% That every agent was colluding, and I don't think they're gonna win that lawsuit. But yeah, it's just and again, it's not written in anywhere. It's not like a good it's not a monopoly in the 6%. But it's just has been in the past a traditional going rate. So 3% To the left side, three to the buy side. And so let's say you were at one of the big brick and mortar ones, you were talking earlier, we're not going to throw any names, but I'm assuming they're all going to be comparable. So you get 3% $30,000 on a million dollar home. What do you actually even make out of that, though, because there's got to be so many hands in that cookie jar, you know, everybody sees a big number, but I'm assuming that number is not even close to what you're actually making. In the end. Yeah, it comes down to what commission split? Are you on with a broker as well? If you do a lot of business at a brokerage, say you're on a 95, five split, so you keep 95% 5% goes to the brokerage, okay? Okay, that could be one. But that means you also have to pay higher fees upfront, to get to that 95, five split, when I first started off, I was getting 6535. So I would keep 65% of the Commission on on a home like that, and the brokerage would get 35%. And that's why again, cloud base, so great, they take a lot less of that, yeah, I'm talking a lot less, at some point, you could actually receive 100%, once you cap out, you can receive 100%, your Commission's but again, at brick and mortars you have to pay for the overhead and pay for the front office, if you will. Yeah. And again, if you're starting off, it makes sense because you get lost. So it all depends, but I'd say anywhere from from 65% 95%. That's typically where it falls into that range. So you know, someone hearing this for the first time, you know, they're trying to do numbers in their head. And you know, this is a podcast all about doing the hustle. So they're trying to think about things, you know, you said you had to start out, you know, in the smaller homes and $200,000 home and then go up to a million, but somewhere between, you know, on a million dollar home, you're making, let's say 20 grand, and on $200,000 home, you're making four grand, you know, somewhere in that range, it's still a lot of money, but people need to understand, what we come back to is that you said, you know you had an interview to be the agent with four other agents or three other agents, you know, like, just because the money's there, the barrier to entry is so low that the competition is so much higher. So you have to really stand out. So do you think the personality you have is what helps you stand out the most is that your track record what gets you now, the success you're having for someone that starts out? It's definitely both it's definitely the personality, but it's a lot of track record is very difficult. For example, my my mom and I have I think over 85 star reviews on Zillow, we do about 40 homes a year we sell by combined about 40 homes a year. Okay, so people know what they're getting with. There's a lot a lot of a track record there. You can call people, you can look online, we're there. And if you're just starting off, it's very difficult. Why should we go with you, we don't know what you've done in the past, we don't know your track record, we don't know what you've done. We don't know how you handle this. We don't know if you might mess up. We don't know if you'll schedule everything it properly or in time, we don't know what your negotiating skills, there's a lot that goes into it. And that's what makes it so difficult is, again, if I didn't have my mom's starting off, it would have been so hard because I would have had no track record. I'm very outgoing. Maybe I get some stuff early on. Maybe I don't. But until you get a track record until you get people who have seen what you have done. It's very difficult because there are a lot of agents, there are a lot of experienced agents out there. And if you are in the business, you'll see the names all the time, so So Ben, if you're driving around some time, you'll see the same few agents pop up all around, because people trust them. It's a name that people trust. They're like, You know what, I don't know if I want to use this guy. I see them all around town. They must be a reason why people are using them. Now. It makes total sense. I mean, I think it's no different than I mean very different topic of conversation. But you know, if you're gonna buy something on Amazon, you're gonna you're gonna trust Amazon. So if you trust when these big brick and mortars you're still gonna get then go find the seller with the best reviews to buy from them. So you know you're getting legit. So it's all just about the grind starting out and yeah, there is a lot of money there but it's just not going to be easy. So I really feel like sometimes people just go after side hustles for the cash because they they just don't want their nine to five they just want to Change it up. But, you know, if you're not a really outgoing person if you're not really interested in helping people and making the money secondary and being willing to not even get paid for a while, because I'm assuming there is no guaranteed salary. In real estate, it's only based on sales. Yes, no guaranteed salary, and you're paying a decent amount in fees, because you have to have really don't have to, but you definitely should pay for the service that you don't want, say the name but the service that gets you into houses, okay. So that's a service you have to pay the local real estate. It's tough not using names. Okay. You're trying to it says TA. I'm out here like, Okay, this is pretty specific over here. But there are a lot of fees you have to pay monthly, quarterly yearly, there's certain fees that you have to pay. And again, it can you can lose money if you're not getting anything. Again, there's no guaranteed money coming in. No one's gonna help you. Yeah, no one's out here saying, let's throw him a bone. Yeah, that's that's a great point. I mean, my biggest question right now like this has nothing to do with like the competitiveness of agents, but like when you drive by and you see a for sale by owner sign? Do you just want to like drive your car through the yard? Or like, what what emotion do you get every time you seen that side? I think they're leaving money on the table a lot of times, which is funny, because they're not paying the commission typically. That's interesting. I truly believe that because they don't know how to typically stage a house, take professional photos, things that we do that's already built into what we do we pay for that on ourselves. My mom and myself leased our team, we do that ourselves. Do they know how the contract works? Do they know what title company to use and not get taken advantage of? Like it's easy to get taken advantage of. It comes down to they also don't get as much traffic because if you're for sale by owner can either see it on Zillow sometimes sometimes, but all real estate agents have a specific website that they go to that shows you know Zillow. Redfin, that shows everything right. There might not be as many eyes on a for sale by owner, they are leaving money on the table by doing that. That's a great point. Okay, so I think we've talked enough about the real estate side, I think you really answered all the questions for anyone considering that for a side hustle. So let's, let's pivot for last five minutes we got. And let's talk about rehabbers. So flippers, so people that want to get into that type of space, do you recommend they go through an agent to find their first one? Like I've heard of lots of agents starting to flip houses themselves? Because they see so many houses that kind of understand it? So are they keeping those houses for themselves and the flippers will never get the best deals from an agent? Or if you find the right agent? If you want to get into flipping houses? Like that's the best way to find them? How will you approach that? I would for sure, it's a fine agent and then find because again, we work with a lot of investors. So find an agent, and then find a business model that works for you. Because obviously, for us, we're not getting 3% on the buy side and 3% on the sell side with with an investor. That would not make sense for the investment company, right? They're trying to make a certain profit. So we figured out something different on the back end, okay, because you're double dipping to an extent, but you don't want to double dip that much. That's just, it would not make sense for the investors. But it does come down to when they go to sell, we had one they tried to sell it for 600,000 For Sale By Owner just to see if they could do it. We got it sold in one day for 650. They couldn't get an offer on it. And one day, we sold it for 650 that already paid for the commission, everything else that we did for him. So they made more money by listing with us than just trying to do a for sale by owner. And then there's so many cases of that. And from that we've house five with them. Wow, they've bought and five houses with us. That's awesome. So again, it comes down to I think it does come down to a lot and having that relationship and finding a business model that works for you and the investors. Right, it has to make financial sense for the real estate agent but it also has to make financial sense, obviously for the investors because they are in it to make money. Yeah, that's very good advice. If you're going to be a flipper, if you're going to try and rehab these to rent them out or to flip them don't try and go it alone because even if you can save a little money on the fees, I mean Sterling just explained pretty well there's 15 Other ways you're gonna get screwed and so you're not going to actually come out ahead in the long run. And so that's worth it. So that was the start to wrap this up. I am curious so you do now you're doing the radio again because after you know post COVID we're kind of back to normal a little bit and you're doing real estate Do you feel like your time is still enjoyable? Are you working so often now like, like what's a typical day looks like to you if you're trying to do real estate and you're doing your radio thing, it just seems overwhelming to most people I would expect. It honestly just depends you have to be pretty good at scheduling things out and again, it comes down to having a team that you trust. Me and my mom are the main two but we also have a couple other people that we will use some times that if we need them to show a house they can show a house for us when it comes to contracts when it comes to writing the contract. We do all of that stuff. But if we need someone to show a house if we're both split say in Florida, say if we both go to Florida, my mom and myself we Well, we're not here, but you can work almost anywhere real estate wise, all the contracts, all the things that you need to do to set up inspections, set up photos set up everything else you can do that pretty much anywhere. But you have to have someone on the ground boots on the ground right and we have people that we trust that can do that for us. It's not often but occasionally we'll we'll have that it comes down to using your time wisely. I still get to play softball on Thursday nights I still play basketball Wednesday nights I still golf a decent amount. It just comes down to when you are not doing those things. What are you doing to grow the business? Because if you're not going forward in real estate, you're going backwards because someone else is out there doing something again that's why I say it's not just a nine to five it's sometimes you don't have anything Wednesday I golfed didn't have any real estate that day. I golf and then when I got done golfing I got back to the office or my my office here my house, got all the work I need to get done kept up on everything. What closings? Do we have scheduled those get the photos scheduled for when those come up in June? Like that's just want you to just stay on top of it every single day just do a little bit every single day. That's very well said Because yeah, Wednesday sounds like a dream life. And then I'm sure last Friday was probably like a 15 hour day from hell. And it just it's a it's a give and take, you know, so yeah. So I think for anyone that's getting into this, it's anyone that's heard this that has been considering it and is like you know what I could do real estate, I'm a people person, I'm gonna give this shot. What is one piece of advice, you want to give a brand new person coming into the space that you haven't given so far, find someone to work with, find someone who can be a mentor to you, even if you're not directly on their team, find someone you can get advice from on a relatively daily basis, weekly basis, somebody can sit and grab coffee, because when you start off, there are a lot of things that you don't know, when it comes to the contract. Yeah, you took those classes. But until you get out in the real world, and you apply them. It's not as simple. So when you're going into the contract, make sure you fill it out correctly. And again. That's why I say having a brick and mortar when you start off does still make a lot of sense. Even if brick and mortars are kind of on the on the downswing as it is right now. I think it doesn't make sense that you haven't a broker in the office daily to ask questions. That's huge. Without that doubt, it would be nearly impossible to get everything that you needed to know in that contract done correctly, the first time having no help. It'd be a nightmare looking up everything going back through your notes through your test stuff, trying to look back and go, Okay, well, it would take you hours and hours and hours. So if you can't find a mentor, can you split your first few Commission's with someone else to help make it easier for you to make sure you're doing it? Right? Sure. There's definitely ways you can go about that. So the better the people person, the less you're paying, the worse the people person, you better be given up some of your commission. That's what it sounds like. That's great. All right. Well, it's really it's been awesome. I gotta ask you the last question that I asked everybody in this podcast. What is your favorite caffeinated beverage get through the day? No black coffee, black coffee for the win, baby. All right, man. I appreciate your time. I really appreciate the vouchers. No, no, no. You're not getting off this easy. What's yours? Anyone asked you this? They haven't asked me. I mean, that's that's coming from the radio guy. No wonder you're the first one. It's gonna be the white Monster Energy. Kansas. Don't tell my wife. Ben. What? Ben? It's I mean, it's why are you a 12 year old named Kyle what's going on? Stop it. Gotta still play some call it dude. You know, it's gonna be black coffee, black coffee for the way and there we go. I can't become. Oh, that's great, Sterling. This is awesome. All right, buddy. I appreciate your time. We're gonna talk soon. Just don't tell anybody but my energy. Thanks for listening to the caffeinated hustle. Sponsored by caffeinated labs LLC. For more information or to connect with Ben, check us out online at caffeinated labs.io. Or email us at support at caffeinated labs.io. Be sure to subscribe so you never miss an episode. Or give us a follow on social media by checking the links in the description. We'll see you next time.