IN THIS ISSUE
- Why you should do an audit on your asset list
- What you can do with one asset that you might have to earn some eat money
- My secret grand plan for my inactive real estate license
- Another opportunity goggles lesson.
I have an asset that I worked reasonably hard to get that is currently out of circulation.
And if you’ve read my previous newsletters, you know this to mean that that asset is not building other assets or making me money.
I’m not even talking about the cash that I’m holding in lieu of leaving it in the stock market. Of course, cash is not an asset, it’s more of a tool.
Reviewing Your Assets
Before I talk about my asset, I wanted to suggest that you keep an inventory of your assets and periodically reevaluate what you are doing with them.
Maybe they are out of circulation, but something simple could be done to put them into service.
For instance, last year I discovered Swimply, which could enable me to list my swimming pool for hourly rent. When we’re not using it, that swimming pool asset that we paid dearly for just sits there. What if we could make a little something when we’re not using it?
You should list your assets and try to find three ideas for each one. And maybe consider if any of your assets could be combined for some kind of complementary offer. These aren’t necessarily digital assets, but the two could go well together.
Being a Real Estate Agent Sucks
I have passed the Texas Real Estate exam twice: once in 2002 and once in 2021. There’s a decent amount of education involved and it’s quite stressful to sit for the exam. It would be a shame to let it expire.
So what to do?
But first, why is it inactive in the first place?
When I decided to renew my license, I saw it as a possible way to make some extra money; maybe just dominate my own neighborhood. And then in my retirement years, that supplemental income would come in handy.
But bootstrapping a real estate business is a real grind and I just didn’t have the stomach for chasing new clients, hanging out at open houses on the weekends, showing houses in the evenings, or dealing with contract details or coordination logistics.
I’m way too damn lazy for all of that.
But the money made on commissions is compelling.
For instance, a broker’s commission split (on average 3%) on a $400,000 home is $12,000. The agent keeps at least 60% and often more. So let’s call it $7,200.
But again, the realtor has to do all of those above-mentioned things. And if the agent is the selling agent, they are often further investing in marketing and netting less in commission fees.
I’m pretty sure I’m not going to not be lazy and I’m not going to not want a piece of that money (gratuitous double-negatives included to keep you paying attention), so what to do?
Being a Referrals Agent Might Not Suck
This is going to be pretty wild and there will be math, but please hang in there.
So when I let my real estate license go inactive I was bombarded with emails from referrals brokerages. I didn’t know what they were and ignored them.
After some research, I learned that these are brokerages staff inactive agents and pay them referral commissions when they refer clients; usually people from their book of business.
Referral commissions average 25% of the full commission. In our example, that’s $1,800 in lieu of the $7,000.
Here’s the best part: the referral agreement is a one-pager that you can digitally sign while sitting on the sofa.
Sounds perfect for someone as lazy as me. I’m a tremendous slouch!
If I refer four people, it’s the same as selling one house as a producing agent.
This is all well and good, but I have no book of business. Where are these referral clients going to come from?
Relocate the Gophers
That neighborhood I thought about dominating—my neighborhood—is built around a country club. People love to live here mostly because of the golf courses.
So there’s the inspiration for this idea:
Create a website for enthusiastic golfers that want to live in country club communities and help them make a move. Matchmake them with a good agent, give them inroads to the club, and throw a few other bonuses in there too.
I can refer people moving to Texas or from Texas and due to the polarizing political climate, there are plenty of people going in each direction.
I would guess it would be easy to test my offer and see if there’s demand; all that’s required is a few ads and a landing page. If there’s a promising demand, I scale up.
Obviously, I have to build my referral network and make some relationships with some clubs. I’d start with my neighborhood and see what I could learn. It only gets real once I have a serious referral client, I’d work it out just in time.
I’m going to assume this probably would eventually work and move on.
Now this part is wild.
In simpler words, when those agents earn commissions, I earn commissions!
I smell leverage.
Commission income is one-time income; good but not great.
Referral income is recurring income; passive and better.
I’m aware of many producing agents that no longer have to produce because they’ve built massive downline organizations.
But for me, where are these agents going to come from for my downline?
Be The Ball
In my previous newsletters, I’ve talked about tapping into flows and harvesting the energy from those flows.
Unfortunately, there’s quite a flow of active agents going inactive. According to the National Association of Realtors (NAR), 87% of realtors leave the business in their first five years.
And given how many emails and texts I’ve received from referral brokerages, it must be easy enough to get their email addresses.
For those folks, I have an opportunity!
If I get this far in my plan, I will have built a working niche-based referral agent system that I can sell to these agents—agents that will go into my downline!
But wait, there’s more.
These agents can sell my system to agents they attract as my affiliates…which builds my downline…which builds my recurring income from the revenue-sharing program.
You can tell I’ve got my opportunity goggles on.
To recap the revenue streams:
- Referral commissions
- Revenue share
- Course sales.
But I also have an interesting bunch of affluent people that could be segmented and offered to. Think golf equipment which seems to have an infinite budget.
I admit, it’s an ambitious, optimistic plan.
But if I can make it work…
I’m alright, nobody worry ’bout me.
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