First things first.
If you’re looking for a way to get rich overnight, you may as well put this book down and go buy another. Then throw that book in the trash, because it’s selling you a lie. I only know of two ways to get rich fast: win the lottery, or have a rich relative die and leave you their fortune. And if you need a book to tell you how to do either of those, you might have bigger problems to worry about.
If, however, you’re interested in the unlimited earning potential of the real estate industry, and you’re ready to put in the hard work to achieve your financial dreams, then this book is for you.
Real estate is a business where you get out of it what you put into it. You can turn it into passive income that can last you the rest of your life; you can do it as a part-time job. But those things come later. First, you have to put in the work. If you’re ready and willing to do it, the rewards are out there waiting for you.
I’ve been in the real estate business since I was nineteen years old. In that time, I’ve been an agent, a broker, a manager, a CEO, an investor, a landlord, and a consultant. I’ve rented apartments, I’ve bought and sold houses, I’ve renovated investment properties, and I’ve negotiated more deals than I can count. In other words, real estate has been at the center of every single day of my adult life.
Real estate is a unique industry. It revolves around one of humanity’s most basic and essential needs—shelter—but unlike, for example, the food service industry, which also satisfies an essential need, you can look at any single real estate transaction and know that you’re taking part in one of the most important moments of that person’s life.
Simply in terms of price, a real estate transaction is one of the biggest purchases a person can make. And I’m not just talking about buying a house. Let’s just look at what it takes to lease an apartment. These days in New York City, it’s tough to find an apartment for less than $2,000 a month. Your typical lease will require the tenant to pay their first and last month’s rent up front, as well as a one-month security deposit (if not more). So we’re already up to $6,000. If there was a broker involved in the deal, you can add in a broker’s fee, which is now often 15 percent of the annual rent—in this case $3,600. Add it all together, and you’ve got a total of nearly $10,000. That’s not even including application fees, pet deposits, renter’s insurance, or the very real possibility that the landlord could ask for more than one month’s security.
Ten thousand dollars is a lot of money to drop in one sitting, and not something most people do every day. The only other common experience that compares is buying a car, and that’s just if we’re talking about renting an apartment. If we’re talking about buying a house, then we could be looking at hundreds of thousands of dollars, plus taking on a mortgage, often the biggest and longest-lasting financial obligation of a person’s life.
If the financial impact of a real estate transaction is huge, then what you get in return for that purchase is even bigger. I’ve had clients over the years who liked to say that they thought of their apartment as nothing more than four walls and a place to sleep, or as just a place to store their stuff. (And I’ve used those same arguments to convince clients to be realistic about their budget and take something they can afford, rather than holding out for an apartment like the ones they see on TV—it’s a common salesman’s refrain in cities where apartments are often tiny and expensive, but there’s a lot to do just outside the door.)
But the truth is, whether it’s an apartment or a house, it’s much more than four walls and a bed. It’s where you start and end your day. It’s where you go to relax, where you go to get away from it all, where you go to be alone, and where you go to be with the people who mean the most to you. It’s where you’ll find comfort when you’re sick, or sad, or just can’t deal with the world. And it’s also where you’ll celebrate all kinds of firsts, triumphs, and personal milestones. In other words, it’s home. Of all the millions of things you can possibly buy in this world, what’s more important than that?
Helping someone find a home—whether as their real estate agent or as a landlord who welcomes them to your property—is an incredibly important, meaningful, and even intimate thing. You’re helping them with one of the biggest decisions they’ll ever face. That’s why it’s so important to approach working in this industry with the respect it deserves.
The real estate business gets a bad rap sometimes. At least according to pop culture and the court of popular opinion, the archetypal characters in real estate are the sleazy, backstabbing agent and the scummy, money-hungry landlord. I’ve met people who fit both of those descriptions. You can make a lot of money in real estate if all you care about is landing a fat commission or getting that rent check every month. But it’s even more rewarding—both financially and personally—to keep the human element in mind.
Why? There’s a whole laundry list of reasons, but number one is referrals.
One lesson that I teach everyone I work with is that the best kind of client you can ever have is one who’s been referred to you by someone you’ve already worked with. Think about it: if people already think, even subconsciously, that real estate agents are all slimy and all landlords are interested in nothing but the monthly rent, then when you interact with a new client or tenant, you’re already starting in a hole that you need to dig yourself out of in order to earn their trust. In other words, in order to prove that you’re trustworthy, you first have to dispel the notion that you’re not.
But with a referral client, they walk in the door already predisposed to like you. Think about the difference between someone who came to you because they happened to see your name on a website or at the bottom of some listing, versus someone who came to you because their friend told them: “He’s an amazing agent. He did such a great job for me when I moved last year.” Or: “There’s an apartment opening up in my building. You should check it out. My landlord is so great.”
It’s a totally different scenario. With a referral client, it’s much easier to establish trust, which means they’ll be quicker to tell you what they really need in a home, which in turn means you’ll be able to help them faster and more easily. And that adds up quicker closings, more closed deals, and more money in your pocket.
But make no mistake: real estate is a business, first and foremost. If you want to achieve financial independence, you’ll have to be tough. You’ll have to develop a thick skin. You’ll have to be a fierce negotiator. But if you also keep in mind how important this is for the people you’re working with, and how they’re letting you into one of the biggest decisions of their lives, if you treat each deal with the respect it deserves, it will pay off for you time and time again. That’s the Heart of the Deal.