But like many other Realtors the Nigerian immigrant is now supplementing his income in other ways
Ike Obasi got the real estate bug four years ago. At the supermarket one day in 2004, the Nigerian immigrant overheard Ernestine Crews, a real estate agent, talking about properties on her cell phone. Obasi approached her and got her card. Crews was so busy it took Obasi two weeks to get through to her.
When they spoke, Crews told Obasi she could make more than his $75,000-a-year salary as a systems administrator for SBC Communications, now AT&T (T), in just a few transactions. She proved it. After Obasi referred two friends who bought homes through her, Crews sent him a finder's fee that made his eyes go wide. "I did the math and figured out what she made," he recalls. By the end of the year he had gotten a real estate license and was working for Crews' Los Angeles-based agency, PrimeTyme Real Estate.
At the peak of the boom in 2006, Obasi was selling $20 million a year worth of properties. His income had quadrupled. "Everyone I knew bought a home," he says. "Uncles, cousins, my friends from SBC. If you married my cousin, you bought a home."
The party ended last year, of course. Transactions have slowed to just a trickle and every one of those is a battle. "The banks changed the guidelines," Obasi says. "Now it's so hard for people to qualify for loans."
Obasi's experience is not unusual. Judging by membership in the National Association of Realtors, the number of people becoming real estate agents nearly doubled between 2000 and 2006. Like Obasi, 95% of members had other jobs before becoming agents. Half work for independent, nonfranchised brokerage firms such as PrimeTyme.
A Drop in Membership
Last year, the number of Realtors fell 1.5%, to 1.3 million. That number doesn't reflect the likely thousands of part-timers who maintain ties to the business but earn a living from other jobs. The Realtors' association figures the median member's income fell 10%, to $42,000, last year. Experienced brokers, those in business 16 years or more, earned $70,000. Those in business two years or less earned just $10,000. The drop in membership, the association says, comes almost exclusively from newcomers to the profession.
On real estate-related Web sites such as ActiveRain.com, the chatter now is about brokers who can't be reached because they are working other jobs, a particular problem now because deals require much more back-and-forth negotiation to close. Ardell DellaLoggia, a broker in Seattle, says she has one agent she's playing phone tag with who obviously has another job. "He calls me and says he can't talk now because he's in a real estate class, but that's a coverup," she says. "When a broker is really in class, he mentions the name of the class."
In Arizona, the number of active members in the state Realtors association has fallen 11% in the past year, to 49,000, says Ron LaMee, vice-president for information services at the association. To stay in business, it typically costs an agent at least $1,000 a year, between association dues, the state licensing renewal fee, and the cost of having access to the multiple listing services. "My sense is that the people leaving the business were not full-time practitioners," LaMee says. "They were doing it as a sideline."
New Job Descriptions
Many who stay in the business are diversifying into other real estate-related jobs such as property management. Obasi, now 37, has become an expert in how to arrange financing for clients. He tells home buyers to put their parents, siblings, and other family members on the mortgage application to boost the income and credit scores needed to qualify for loans. He reminds borrowers that the Federal Housing Administration, which has stepped in to offer more loans after private mortgage companies went out of business, still offers loans with down payments of as little as 3%.
He also spends a great deal of time coaching would-be buyers in how to improve their credit scores. His suggestions include offering to negotiate settlements with debt collection agencies and asking credit-card companies to reduce minimum payments so delinquencies don't appear on a borrower's records.
Obasi serves up his own story as inspiration. In 2004 he bought an empty five-unit building in Los Angeles' gritty Compton neighborhood for $515,000. Obasi didn't know what he was getting into. He said the construction was so shoddy that water leaked from the walls when he turned on the faucets. The neighborhood was dangerous enough that Crews told him not to go there at night. "I bought my first gun when I bought my first property," Obasi says. But two years later he sold the building for $889,000.
"There's still a lot of opportunity," Obasi says. "Even in the worst areas [of Los Angeles], a two-bedroom apartment still rents for $1,200 a month. Everybody wants to live here. Rents are going to keep going up and up."
Obasi has since joined Crews in a new venture, Ecrews Enterprises. On a recent Thursday night in mid-May the pair were in an L.A. hotel conference room trying to drum up business for the company, which sells advice on how to improve personal credit scores and purchase investment property. Obasi, who serves as chief financial officer of Ecrews, still operates as a real estate agent. "Most millionaires make their money in real estate," he told an audience of about a dozen potential investors. "When you turn on the TV and you see people saying housing prices are going down, do you know who's buying? The people who own those TV stations!"