The Color of Money: Unique Ways to Prosper in Today’s Challenging Market

The Color of Money: Unique Ways to Prosper in Today’s Challenging Market


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Prices, number of transactions and profit margins are deteriorating. Whether you are an agent, owner, broker or manager, increasing your income in today’s challenging market requires a shift in mindset that deals with the “three colors of money”.

Besides being a Branch Manager of the eXp office in Beverly Hills and the 2019 Realtor of the Greater Los Angeles Realtors Association, Taunee English is one of the smartest experts on how to create unique revenue streams for your real estate business.

According to the English, the path to maximizing financial security requires you to tackle the three levels of what it calls the “three colors of money: green, gold, and purple.”

Green color

Most real estate professionals run their business exclusively at the “green” level. On the green level, you trade your time for money. In other words, if you don’t work, you don’t earn. However, the other two levels work best when the green parts of your business are also strong.

To generate more “green” profits, here are four areas to consider adding to your business.

Referrals

Failure to make outbound referrals is a huge profit gap in most agent businesses. A good example of this is our neighbors who decided to return to Bellevue just before the pandemic began. Here’s the extra work the listing agent missed for not making the outbound referral to Bellevue.

  • 25% referral fee for referring an outgoing buyer to Bellevue.
  • When her clients decided to return to Texas, they were paid a 25 percent referral fee to introduce them to three of Bellevue’s top listing agents.
  • A full commission representing their previous clients on the purchase of their alternative housing in our area.

That’s a total of three commissions from one customer in less than 30 months.

1-4 Characteristics of the unit

In previous downturns, single to four-unit investment real estate was a powerful way to expand your business. Some of the advantages of working with these investment properties include:

  • Obtaining the same financing as single family homes.
  • Benefit from tax deductions associated with primary residence ownership as well as investment ownership. (We always advise clients to check tax consequences with a tax professional.)
  • As rents rise, so does the ability to raise rents to market levels when units become vacant.

Commercial and real estate 5 + units and raw land

Since financing and other issues are more complex in selling these types of properties, unless you have specific experience in these areas, consider partnering with an experienced agent or referring the agent’s business for a 25 percent referral fee.

Business

This is another area that can get complicated, however, and many small businesses have set up shop in a tiny home or rented out a property they own. Even if you need a business broker to handle the sale of the company, you can definitely list their properties.

He went

Gold activities take advantage of others’ time and/or produce passive income. The two primary ways real estate professionals take advantage of others’ time is by becoming an owner broker or starting a team.

In terms of creating passive income, there are a variety of ways to do this. Common examples include:

  • investment real estate
  • Investing in a Real Estate Investment Trust (REIT)
  • Investing in a business you don’t manage
  • Memoranda of Trust and Deeds
  • Seller Return Financing

Delaware Legal Funds

The English have devised a great way to attract real estate investors who no longer want to manage their existing real estate investments using what is known as Delaware Legal Fund (the summer timing). Daylight saving time is:

A separate legal entity created under the laws of Delaware to hold ownership of one or more income-producing commercial real estate. DST display can be any type of commercial property; Apartments, retail spaces, office buildings, industrial parks, etc.

Just like a REIT (Real Estate Investment Trust), a single DST may have ownership of several properties at once. If a DST contains multiple assets, please note that it may be necessary to file a tax return in each state with DST characteristics.

Each investor owns a “beneficial interest” in the trust who in turn owns the underlying real property. This DST benefit gives the investor his or her share of income and appreciation in the DST assets.

For investors who no longer want the hassle of managing an investment property but want to retain the benefits of doing a 1031 tax-deferred exchange, DST provides an excellent way to achieve this goal.

Since DST requires an individual to be an “accredited investor” with a minimum income of $200,000 plus a net worth of at least $1 million excluding primary residence, you may be wondering how to use DST since you can’t legally give yourself tips investment for clients.

What you can do is provide your clients with information about DSTs so that they can then show their tax advisor. The tax person determines whether this approach will work for their clients. If their tax advisor agrees, schedule a listing date. Here’s the step-by-step process.

Start by creating a digital, print or social media campaign that says:

Tired of trouble with tenants?

Find out the other alternative to making a 1031 exchange

To find out more, contact Sally’s agent at:

888-555-1212

Once you create a lead, explain that the other alternative is known as a Delaware Legal Fund. then ask,

Would you like me to send you some articles to take to a tax professional to determine if a Delaware Legal Fund will work for your personal investment situation?

Warning: Under no circumstances do not discuss how DST works. Again, your goal is to provide your client with the information so they can have it evaluated by their tax advisor to see if it works for their specific situation.

close by saying:

If your tax advisor feels that the Delaware Statutory Trust is appropriate for your tax situation, I will be happy to schedule a listing appointment to discuss marketing your property.

The following three companies provide helpful information explaining how daylight saving time works, including the pros and cons.

purple

Purple is the highest level in the English language model. In this model, you do the work once and get paid frequently. Examples of this approach in residential real estate are the EXIT Realty Residual Program, the eXp Revenue Share Model, the HomeSmart Lifetime Residual Income Program, and the Keller Williams Profit Share program.

Below are two case studies illustrating how the English language generates “violet” money for its business.

Become a life insurance agent

The English say that becoming a life insurance agent is much easier than passing a real estate exam. Furthermore, she is only using her license to sell life insurance in order to pay off the mortgage on her client’s new home in the event of the death of one or both of the breadwinners.

Before closing, the English ask their clients if they would like a life insurance policy that would pay off the debts owed on their home in the event of the death of one of the owners. Many of its clients agree to do so.

The beauty of this approach is that premiums generate income for them each year. It also allows English to stay in touch on birthdays and renewal dates, as well as generate leads when their clients need more space for a new baby, are relocated, or decide to downsize.

Once the deal closes, its buyers will be bombarded with this kind of offer. The English approach is to take possession of the business before it closes, but more importantly, to provide its clients with financial stability in the event of an unexpected death.

write a book

The good news is that you don’t necessarily have to write the book. A ghost writer can do it for you, but you’ll need a good subject. The book allows you to generate revenue from Amazon (which makes publishing it relatively easy). However, the real value lies in establishing yourself as an expert in your local market, as well as generating more leads.

English book title is, Do you want to leave California?

The English identified 10 states to which Californians were moving. She then worked with her contacts at the Women’s Council to identify three top brokers in each market where her clients might relocate. When you give the book to someone, she asks where her clients will move. At this point, she has provided the buyer with three names, all vetted with which she has a written referral agreement for a 25 percent referral fee for any work she submits to the agent.

Are you ready to maximize your financial security? If so, be sure to take advantage of all three colors of money in your business – green, gold, and purple.





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