Super useful tips on how to start a real estate business

Thinking about getting into the real estate industry? Learning how to start a real estate business is the first step. Real estate offers many opportunities for business and can bring in significant profits if you do it right. Here, we’ll take you through the steps to help you create a successful real estate business in today’s market.

What does a real estate business entail?

In a real estate business, you buy, handle, and sell properties to make money. This includes homes, businesses, and land. You could earn from rent, flipping houses, or building properties.

That said, a successful real estate endeavor is not just about buying and selling. It involves studying the real estate market, planning property investments, managing properties, and keeping good relationships with customers. 

What are the advantages of being in the real estate business?

If done right, a real estate business can be immensely profitable. It has the potential for a steady income stream – whether as profits from buying and selling or as rent from rental properties. This consistent income not only ensures financial stability but also acts as a buffer against market fluctuations.

Another advantage lies in the appreciation of property values over time. Real estate tends to increase in value, leading to significant profits when properties are eventually sold. As living costs rise, rental incomes and property values tend to increase, safeguarding the investor’s purchasing power. 

Additionally, real estate investors enjoy various tax benefits, such as deductions for depreciation, mortgage interest, and property taxes. These deductions play a crucial role in reducing overall tax liability.

Investing in real estate also provides the opportunity to diversify one’s investment portfolio, a strategy that helps mitigate risk and enhance overall financial well-being.

What are the most common types of real estate professions?

If you’re planning to enter the real estate field, it’s important to understand the various types of businesses. Each category presents distinct opportunities and challenges. And, making the right choice can greatly impact your success in real estate. Below, we will list the most important real estate professionals. 

And, we’ll guide you on the best path to achieve success in each category.  

Real estate developer

Real estate development involves taking on larger projects, such as buying land and constructing houses. Or, significantly renovating buildings. While this can be highly profitable, it carries more significant risks. Moreover, it requires substantial capital and expertise in project management, construction, and market analysis.

Real estate agent

A realtor or real estate agent facilitates the buying and selling of properties for potential clients, earning a commission on transactions. Remember that this job profile requires a license to practice, strong interpersonal skills, and a deep understanding of the real estate market.

Real estate wholesaler

This job description involves finding undervalued properties, contracting them, and selling those real estate contracts to potential buyers, often investors. The good news is that it doesn’t usually demand significant capital, making it an appealing entry point for newcomers.

House flipper

This widely-known business model involves buying properties, often in need of repairs or renovation, and selling them at a higher price for profit. The thing to keep in mind about house flipping is that it requires a sharp eye to identify properties with potential value, knowledge of renovation costs, and the ability to act swiftly in competitive markets.

Buy and hold investors 

This is a long-term investment strategy where properties are purchased and held onto for an extended period. It has the potential to generate good passive income for the property owner. Real estate investors typically earn through rental income during the holding period and substantial capital gains upon eventual sale. 

How to start a real estate business as a developer?

Becoming a real estate developer involves several steps, but here’s a simplified guide. 

Get the right education

A bachelor’s degree in a related field such as management, business, accounting, engineering, construction management, finance, or law comes in handy. You could even consider a Master’s Degree in Real Estate Development for further education.

Get a license

You will need to obtain a real estate license by studying for and passing a state-issued exam.

Gain good real estate experience

Work in real estate, either as a licensed agent or with a real estate developer, to gain practical experience.

Build connections in the industry

Network with professionals in the industry through social media platforms and local events.

Have the financial know-how

Take classes on financial planning to learn budgeting and project finance management.

Know your market

Research and understand the local real estate market, considering trends and marketing strategies in both residential and commercial property development.

Understand real estate contracts

Learn how to read and draft legal documents related to real estate development by taking the requisite course.

Consider certification

While not mandatory, getting certified can enhance your credibility. Requirements include an active real estate license, three years of relevant experience, and completion of specific courses and exams.

How to start your journey as a real estate agent?

If you want to become a certified real estate agent, you’ll need to invest your time and effort. Keep in mind that the requirements vary by state, so it’s essential to research the specific rules in your area.

Research your state’s requirements

Check your state’s real estate regulatory office website for specific requirements.

Look into the age factor, education, prelicensing courses, exams, application process, fees, background checks, and continuing education.

Take a prelicensing course

You must take a pre-licensing course. Always do it from an accredited real estate licensing school. This costs around $350.

However, the total course hours vary by state. For example, it is 135 hours in California, 75 hours in New York and Georgia, and 63 hours in Florida.

Courses are available online, in-person at real estate schools, and at community colleges.

Take the licensing exam

Schedule, register, and pay for the licensing exam, which costs anywhere between $100 to $300.

The exam has a national portion and a state-specific section, both in multiple-choice format.

Passing grades on both sections are required to pass the exam.

Activate your real estate agent license

Submit an application with the necessary documents and fees to your state’s real estate regulatory organization. This process costs approximately $200 to $400, on average.  

After approval, your license certificate will be mailed to you.

Consider becoming a realtor

Realtors are different from regular real estate agents. They are members of the National Association of Realtors (NAR). Moreover, they have to adhere to a strict Code of Ethics.

The NAR membership, costing around $190, provides access to benefits such as business tools, market data, educational opportunities, and discount programs.

Join a real estate brokerage

Work under a supervising broker licensed by the state. This will help you gain good work experience and build a reputation for handling real estate transactions. Keep in mind that instead of an hourly salary or a flat fee, you’ll likely earn a percentage of commissions from the real estate companies. 

What does it take to be a good real estate wholesaler? 

Selling a property you don’t own usually needs a license in most states. But, wholesalers offer the right to buy a property, not the property itself. In many states, this difference means wholesalers may not need a license. That said, it’s crucial to check your state laws with a real estate attorney. For instance, in some states, such as Illinois and Oklahoma, unlicensed real estate wholesaling is illegal.

Real estate wholesaling requires hard work, time, commitment, and patience, along with strong communication and marketing skills. Building a network of interested investors is crucial, and successful wholesaling involves finding distressed properties owned by homeowners eager to sell.

To be a successful real estate wholesaler, you need:

• A goal-oriented personality.
• Efficient organizational skills.
• The ability to partner with those who have access to potential leads, such as the Multiple Listing Service (MLS).
• Knowledge of technology, including CRM software, mobile apps, and websites, to streamline the wholesaling process.

How to go about real estate wholesaling? 

Here’s a step-by-step guide to walk you through this real estate strategy.

• Understand local wholesaling laws and property values in target areas.
• Search for distressed properties below market value, focusing on motivated sellers (e.g., foreclosures, liens). You can utilize resources such as MLS, networking groups, online auctions, social media, and foreclosure sites.
• Calculate fair market value, assess repair costs, and determine after-repair value.
• Calculate a maximum allowable offer for a profitable wholesale transaction.
• Contact the home seller. Make sure you follow state laws.
• Present an offer, secure the property under contract, and ensure the right to assign it.
• Include a contingency allowing withdrawal if a buyer isn’t found before the contract expires.
• Market your contract to potential investors through networking, both online and offline. Don’t hesitate to network with your friends and family!
• Find a buyer and reassign the contract.
• Close the deal with the selected investor, agreeing on terms and conditions.
• Ensure compensation for your efforts as a wholesaler in finding and assembling the deal. 

How to flip houses successfully?

Many people venture into real estate through house flipping to either supplement their income part-time or test the waters for a real estate career. If you’re considering becoming a house flipper, these steps will guide you in starting on the best path.

Get your real estate license

While not mandatory, obtaining a real estate license can provide valuable knowledge about the buying and selling process. 

Access the MLS

The Multiple Listing Service is crucial for accurate property information. To access it, you typically need to be a real estate agent. Being part of national, state, and local real estate associations is necessary.

Receive brokerage support

Seek guidance from real estate brokers who can offer valuable advice and support. Brokers can also provide exposure by allowing your property to be listed within the firm first.

Purchase a property

Utilize your real estate license to access the MLS for property deals. Consider financing options, property value trends, and whether you’ll involve real estate investors in the purchase or not.

Renovate the house

Stay on budget during renovations to ensure profitability. Create a budget. You could consider 0% APR credit cards or home improvement loans. Some cost-effective renovation methods include reusing materials, sticking to classic designs, and accepting bids from contractors.

Flip the property and earn a commission

You could pay a commission to the agent representing the buyer (typically 2% to 3%). Or, if you have a real estate license, it will allow you to represent your own property. That will help save money on listing commissions and contribute to overall profitability.

How to start a real estate business as a hold-and-buy investor?

In the buy-and-hold approach, you acquire a stock or another form of equity (in this case, real estate) and retain ownership without selling it. The underlying strategy is based on the belief that by holding onto the asset over an extended period, potential market volatility notwithstanding, the asset may appreciate in value.

Selecting the right market area is a crucial element in the buy-and-hold real estate strategy. To ensure success, you need to pinpoint an area that exhibits a favorable rental market and potential property appreciation.

What is the best way to start a real estate business, in general?

The real estate journey presents enticing prospects for both newcomers and experienced investors. Keep in mind that success in real estate hinges on meticulous planning, ongoing learning, and the ability to adapt to dynamic market conditions. The ultimate goal is to plan well, grasp profit potential, and steer clear of common pitfalls. Remember that growing your business requires time, patience, money, ongoing education, and lots of effort.  

Here are the steps that will lead you to a thriving real estate venture.

Define your business goals

Before diving into real estate, align your professional aspirations with personal goals. Envision your long-term objectives and break them into actionable steps. Identify your unique strengths, target demographic, budget, and funding needs.

Study the real estate industry and your target audience

Understand the diverse opportunities in real estate. Choose a niche based on your preferences and skills. Research competitors, engage with local professionals, and analyze market trends. Thoroughly study your chosen area’s market dynamics.

Decide on your business strategy

Based on research, determine your role the real estate – whether as an agent, wholesaler, property manager, investor, or a combination. Develop a comprehensive business structure outlining your strategy, resources, and tools.

Learn all about real estate insurance

Identify the insurance types essential for your real estate business. Coverage may include business owners’ policies, professional liability, workers’ compensation, and more. Remember that adequate insurance safeguards against potential risks.

Determine your startup costs

Evaluate the costs associated with starting your real estate business. This may include business licenses, insurance, business entity establishment, and software systems. Understand your financial standing and explore various financing options.

Acquire the necessary licenses

Obtain the required licenses and permits based on your business location and activities. Note that certain real estate activities may not require a traditional real estate license. Ensure compliance with state, county, and city regulations.

FAQs

What sets a real estate investor apart from a real estate developer?

An investor buys existing properties for investment, planning to sell them when their values increase. On the other hand, a developer oversees the development of land or structures. They handle real estate business plans, design, financing, and construction, often focusing on renovations.

How does real estate wholesaling differ from house flipping? 

House flipping entails purchasing a property, renovating it, and selling it for a profit. In wholesaling, there’s no home improvement involved. Instead, you identify a buyer who plans to renovate the property for resale or rental. And, reassign the contracts. 

Do real estate developers work on both commercial and residential projects?

While some developers specialize in one area, others manage both residential and commercial property development.

How does a real estate wholesaler make a profit?

Wholesale real estate is a short-term strategy for investors to generate quick income in real estate. The process involves a wholesaler securing a purchase contract for a property with a small deposit. This contract specifies the resale amount and timeframe. The wholesaler then seeks an investor, assigns the contract at a higher price, and earns a wholesale fee, typically 5% to 10% of the property price.

What is the difference between a real estate broker, wholesaler, real estate agent, and realtor?

Wholesalers, brokers, and real estate agents act as intermediaries in home sales. Real estate brokers and agents require licensing and earn fees from sellers, never owning the property. Realtors are members of the National Association of Realtors. In contrast, wholesalers may briefly own the property before selling, often without licensing. And, their fee is paid by the buyer, not the home seller.

Written by Ramona Sinha. October 24, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.