The Advantages to Real Estate Brokers/Agents of Creating a $5,000,000 Real Estate Fund
You control the decisions as to what to purchase, when to purchase and when to sell.
Presuming you are a realtor you will retain the purchase commission, generally 3%, of the purchase price and 3% on the property liquidation.
When you liquidate you will likely reinvest the money into another property (3%) again.
Your business plan should consist of at least two areas of proposed activities.
A rental Income operation (Airbnb / VRBO) and a (Fix and Flip) operation.
In these specific cases, you can make a compelling argument to prospective investors in a business plan.
Investors know and understand what an Airbnb / VRBO business is and how it operates. I have done business plans for this type of business and the numbers and logic of investing with limited risk can be very compelling. More so than soliciting Investors for any other type of business opportunity because they understand it. You just need to explain it properly in your business plan and provide them with the proper incentive to invest.
The same applies to the Fix and Flip operation. When the right opportunity presents itself you just act. There is no one you need to ask permission from before purchasing. The advantage to you, as a broker, is that in fix-and-flip situations the properties/money can be turned over 2 or 3 times in one 12-month period. On just $1,000,000 that is 3%+3%+3%+3% ($120,000) in commissions. On $5,000,000 it is $600,000 in commissions.
