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Going solo in real estate has its risks, but rewards are considerable

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The number of licensed California real estate agents continues to mushroom as more and more people intent on cashing in on California's real estate boom or making career changes are flooding the industry.

Tiffany Torgan, president, Prestige Properties Realty of La Jolla

In many cases, they are of the mind that going to work for one of the large, well-known real estate companies is the best way to go about making that transition. While it may be a solution for those whose nature falls on the less entrepreneurial side, going solo can also hold some appeal for those who don't mind taking a little risk in order to gain bigger rewards. The same holds true for those realtors who have started out working for the big companies but now feel they can earn more money, have more independence and better control their destiny by being out on their own.

Tiffany Torgan, founder and president of Prestige Properties Realty of La Jolla, found herself in that very position, working for a large real estate brokerage and generating tremendous amounts of revenue for the company while feeling underappreciated and unsupported.

She made the decision 12 years ago to break out of that mold and establish her own Web-based real estate business, specializing in relocations to the Dallas area where she lived at the time.

Torgan believes that entrepreneurial types with a little working capital, a strong real estate foundation and a healthy dose of self-confidence can find much of the same success and gratification that she has experienced by starting her own real estate business.

Getting started actually wasn't that hard, Torgan explained. After becoming licensed in the state, her first step was to contact the California Department of Real Estate (DRE) to find out what was involved in establishing an independent real estate brokerage.

"You have to find a broker of record, or become one yourself, because agents cannot conduct real estate transactions in California without a broker," she said. "Then you have to create a business name, register as a DBA (doing business as), publish your fictitious business name, and then register with the DRE before you can start conducting business as an independent entity."

Torgan said that agents and brokers who want to establish their own businesses should have a six-month cash reserve to tide them over during the initial stages and will need approximately $15,000 to cover start-up expenses. These include the cost of building and hosting a Web site, signage, corporate identity and logo design, letterhead and business cards, computer, phone and fax, errors and omissions (E&O) insurance, and assorted licenses and registrations with government and industry agencies.

It's also important from the outset, Torgan says, to determine how they will brand and market their business so that it will stand out from the formidable competition that now exists in the industry.

"It's absolutely critical to find a niche or a unique marketing angle," she said. "You can do that by specializing, for example, in a specific geographic market, like the coastal area, or a client type, such as doctors or investors. The number of licensed agents in California has doubled since 2003, and because of this increased competition, you almost have to become a specialist in order to compete and survive."

Part of that marketing effort might also involve the development of a mission statement and a strategic plan that will provide a guideline or blueprint to follow in order to keep the business focused on its goals and objectives.

"It's wise to have a plan that keeps everyone on task in support of strategic goals, but it also must be flexible enough to respond to market trends and changes," Torgan said. "As the market changes, so too must the business. I found that it helped to learn other aspects of the business, like loans and refinances, to keep things going in down times. You have to adapt to the cyclical nature of the business or you'll be left behind. You have to re-invent yourself every now and then."

Torgan adds that technology has become an invaluable resource and a factor worthy of serious consideration. It's a huge part of the real estate business today and a highly effective marketing and client service tool that must be embraced, particularly when two-thirds of all homebuyers begin their shopping experience online.

She believes it is critical that a start-up agency have an easily navigable, user-friendly Web site, preferably featuring virtual tours. And she sees emerging cell phone technology as the next big wave for agents, allowing them to pull up and view properties on their mobile phones or PDAs.

As a relative newcomer to the San Diego market, Torgan achieved early success by applying her strong industry knowledge, exceptional client service skills, and dogged determination to quickly become one of the top producing agencies in San Diego County. So she has a firm handle on the ingredients that are necessary for success as a solo practitioner.

"Know what's happening in the marketplace, including trends and hot spots," she said. "Keep up with new technology, be flexible to respond to market changes, know the legal aspects of the business and have confidence in your capabilities."

However, Torgan has a list of things to avoid.

"Don't overextend yourself or grow to quickly; pace yourself," she said. "Keep your overhead low, especially in the beginning when the income may be lean. Don't hire lots of agents believing that the more you have the more money you'll make. You'll be disappointed. Don't be careless in the allocation of your marketing dollars. Be selective, track the leads where your business is coming from, and then continue to farm them and capitalize on them."

Much like an adventurer exploring new territory, exciting new discoveries and experiences can lie around the next bend in the road for the real estate entrepreneur who has made the commitment to go solo. But it takes the right preparation, the right mindset, the right tools and the right path to make the journey not only enjoyable, but also well worth the considerable effort.

Barrett is a writer at Beck Ellman Heald agency

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