Successfully pulling off a side hustle in conjunction with a bustling real estate career is no easy feat, but these pros have pulled it off multiple times. Learn their secrets on how to start a successful side business in real estate here.
Nearly 20 years ago, Kenny Klaus was a driver for FedEx. It was a job that he held for more than a decade before, in the early 2000s, he decided to build a new career for himself. Today, he’s the leader of the Kenny Klaus team at a Phoenix-area Keller Williams brokerage.
But what’s perhaps most remarkable about Klaus’ transformation into a successful real estate professional is all of his side jobs.
Somehow, he has also managed to pick up a number of rental properties, become the owner of three restaurants and lead his team as they launched OfferDepot, a program that aims to be a kind of Expedia for iBuying.
Klaus’s story epitomizes the multitude of ways in which a real estate career can lead naturally to a multitude of side hustles — hustles that, for some agents, eventually evolve into main gigs.
Successfully pulling off these kinds of side jobs isn’t easy, but multiple agents who spoke to Inman for this story said that with planning and hard work, it is possible. Here are their tips for making it happen:
Look to your existing contacts for funding
Let’s get the first big thing out of the way here: If you want to build a successful side business it can take money and often more of it than any one person might have. That means fundraising.
Horwat and her business partner David Bramante are a pair of serial side hustlers who not long ago were working primarily as agents in Los Angeles.
At the time, she recalled a listing in L.A.’s beach-side Venice neighborhood that elicited stiff competition and multiple bids, including from two would-be buyers who had a lot of money but not enough to pay cash.
“I think both of them had a decent amount of cash, like $200,000,” Horwat said. “But not enough to be competitive verses all-cash offers.”
After the sale closed, Horwat talked to the people who lost the bid and found out they were really just looking to park their money in real estate because they understood it was a good investment.
“One guy even said, ‘I’m happy renting,'” Horwat recalled.
As a result, Horwat talked to the would-be buyers about investing in a flipping project instead. She explained to Inman that they were ideal investors because they had enough money to actually make a difference, but had been priced out of owning in their own markets.
And, she added, it eventually paid off; the flipping projects were completed, and the investors made enough money that they’ve now come back for more.
“They’ve invested in a couple of different deals with a handful of people now,” Horwat said.
The story illustrates the way that Horwat and Bramante have gradually built up and diversified their various real estate ventures. For example their most recent venture, iBuyer startup Commerish, launched with $10 million in funding that the duo raised from among their existing contacts in the Los Angeles area.
Bramante advised Realtors to start small. He told Inman that leasing and property management are good entry points for agents wanting to branch out and that focusing on relationships will help people become “more comfortable investing money with you in the future.”
Horwat also pointed out that investors may be willing to ride along as an entrepreneur scales up, handing over more and more money to people they trust to deliver returns.
“You really have to think about how you can use your current employment to position yourself as a person to invest in,” Horwat said. “Then when you come to them with a tech idea, those people are definitely going to invest in you.”
Block out time for the things that produce the best returns
Dex Lipovic has more than 13,000 Instagram followers and a website littered with links to stories and videos that have featured him. He’s what’s become known as an online “influencer,” or someone who is sufficiently successful at social media that they can consistently generate both interest and financial returns.
It’s a digital side hustle that Lipovic, a New York City-based Compass agent, uses symbiotically with his real estate business as he generates leads and connects with potential clients.
On Instagram, the social network to which he devotes the most time, his posts range from pictures of property to clips of his appearances on TV to highly produced videos touting his services.
Though Instagram may feel like a leisure activity to some, it’s serious business for Lipovic. He blocks out time each day specifically to work on his presence on the social network and has hired production professionals to help him create more polished content.
For agents looking to turn their online avatars into successful standalone projects, he said those can be effective beginning steps.
“I would start with Instagram because it’s the hottest commodity among social media right now,” Lipovic told Inman. “And I would say invest in a videographer and a post-production editor.”
This isn’t just some idle vanity project for Lipovic. He told Inman that he carefully tracts his social media and that as a marketing expense it has easily produced the highest return on investment for him.
He hasn’t even sent out mailers in years, he added, though successfully building a social media brand requires “differentiating yourself from the other hundreds of thousands of real estate agents.”
“Integrate yourself and personal brand into every single one of your videos,” he suggested. “And I highly recommend you schedule prospecting in the early mornings or during your power hour. It’s one of the more important things for your business.”
Make a plan and live frugally to achieve it
All of the entrepreneurs who spoke to Inman for this story talked about the importance of planning to achieve goals. Lipovic, for example, described himself as a “serial planner” and described scheduling out a week’s worth of activities for himself.
Klaus agreed that planning is key but added that for him living frugally to make his plans work also proved to be essential. The planning began years ago, he said, and included sitting down with his wife so they could come up with a strategy to acquire a handful of rental properties.
It was a kind of “exit plan” for the couple that would allow them to eventually live entirely on passive income, and he recalled the stress of financially stretching to purchase their first rental.
“Can we really own a second home?” Klaus remembered wondering at the time. “Buying the very first rental property was a struggle.”
But subsequent purchases became easier and easier, and gradually, Klaus built up a diverse group of properties and other businesses, including his restaurants. He advised Realtors looking to follow a similar path to “really get a vision of what you want to accomplish.”
Unlike many other entrepreneurs, Klaus said that he has not gone into debt to finance business expansions such as restaurants and OfferDepot. Instead, he has saved and then reinvested existing money. He did this by forgoing some of the more extravagant expenses other Realtors might splurge on.
“You can find ways to save more or cut more out,” he argued. “I think a lot of agents get caught up in the idea that you need to have a nice car to sell real estate. But you don’t.”
Asked about how to succeed at this strategy, Klaus said he worked within a budget and “always had a goal.”
“You’d be amazed when you have a plan,” Klaus said. “When people have purpose they do amazing things. You can be anywhere you want in five years.”