Real Estate Careers (Part 3 - The EXIT Strategy)

(Sorry, but this is a long one. You may want to get a snack and something to drink.)

What a title, are you thinking "Hey, I am just getting into the real estate business, why are you talking about an Exit Strategy?" That is the way you should be thinking. You should be looking at this business as a long and successful venture. But, one the biggest mistakes almost everyone makes in their career and in life in general is to fail to plan long-term.

When I was a 20 something and anyone mentioned retirement, I really did not want to listen. That was something that was so far away that I could wait years before starting to plan. Besides, in my 20s how did I even know what I would want to be doing when I was retirement age. Well, regardless of what you are going to do in retirement, it is going to cost you money - a lot more money than you can imagine.

Real Estate as a career has been one of the harshest businesses on our people when it comes to planning for the future. In a 9 to 5 job, in most cases, you have a retirement plan and in many cases you also have access to a 401K plan that allows you to save tax free + maybe a little extra from an employer contribution. Well, guess what - in real estate you are an independent contractor most likely and YOU are your own employer. YOU are the one responsible for retirement planning.

Historically, real estate professionals have taken a few limited routes to care for their retirement needs. One of course was to buy real estate - a great idea for all occupations - and get the property paid for by retirement age. That way, you would have your rental income to live on. Or you could sell the property and finance it yourself - so you could live off the monthly payments from the buyers. Like I said, a great plan for ALL occupations, but this should not be your only plan.

Of course, as independent contractors, some might have hired a financial adviser and they might have been making regular investments in an IRA or some other Defined Benefit Plan. Like owning real estate, these are great instruments to use. Their personal wants and needs for retirement would have guided their advisor to select the right investment vehicle for them.

Real estate has up and down years, further making it difficult for an agent to stick to a long range investment plan - there will be lean years. Unfortunately some agents do nothing, so they are really between a rock and a hard place at retirement age. With only Social Security available to them, many are not able to retire - they must keep producing until they are no longer able to work. Sometimes a health issue or injury brings on that date even sooner and the lack of planning is magnified.

If you have read much of my past ramblings, you know all of this is leading someplace. There must be something more I can offer for you to consider. This will be one of the very most important decisions you make in your new real estate career. This directly relates to Parts 1 and 2 of this series and our discussions about selecting the right broker for you!

You are surely familiar with the two dimensional history of real estate - we list properties and we sell properties. That is how we get paid - all the daily duties of the business, all our expertise, all our improvement and training efforts relate to those two dimensions - listing and selling. There is now a third dimension to real estate that was designed and built by one company. That company is EXIT Realty - good name, right? The name fits well with "The EXIT Strategy" that I would like to share with you. You can do more than just list and sell to secure your future retirement - regardless of how many years away that may be.

Here is the plan:
The simplest description is to call the plan "Residuals". While residual income is nothing new, since the insurance industry and the recording industry has used this for decades. They pay their agents and artists long term benefits for work they have done that continues to benefit the company. In real estate, obviously, you sell a property and there is no long term money coming in, so how can you earn residual income from this industry?

Here is the secret that EXIT has figured out - why someone didn't see it sooner is hard to imagine. The EXIT plan for residuals rewards the agent who helps build the company. If you as an EXIT Associate introduce another agent to EXIT, you bring into the company an ongoing source of income. Just like premiums on an insurance policy or the fees for a recording that continues to play on the radio, the new EXIT agent is going to produce income for the brokerage as long as they are an EXIT Associate. So with residuals, you are rewarded for bringing the new agent into the company?

This makes EXIT a successful company because every new agent has a sponsor - a mentor who has a vested interest in seeing that the new agent is productive and successful. There is only residual income to the sponsor when that new agent produces. Since every EXIT Realty agent is in the system by invitation, we all have someone supporting us.

THIS IS NOT MULTI-LEVEL MARKETING. Don't let other brokers tell you that it is. There are some companies that do pay for up to 7 levels of recruits. But their plans are based on profit sharing - sometimes there is no profit. You will never figure out their formula and they cannot explain it to you. Don't fall for a plan that makes no sense to you.

At EXIT, you are only paid residual income based on your personal recruits - whoever they recruit will never add a penny to your income as a residual benefit. However, when one of your recruits earns a commission, you will be paid a residual bonus from EXIT International based on an amount equivalent to 10% of the gross commission your recruit produced.

This is not 'smoke and mirrors' this is as simple as the residual income your insurance agent or your favorite singer or actor earns. Like them, the company continues to benefit from your efforts, so you are rewarded.

Here is the EXIT Strategy that I promised at the beginning of this blog. If you decide to retire many years from now, as long as your recruits continue to produce, you continue to receive a bonus equivalent of 7% of their gross commissions. AND, unlike other retirement plans, you can continue to build your residuals in retirement. You do this by continuing to sponsor new associates into the EXIT system. If you don't like retirement, you can return to active status at any time and build back to the 10% residual level.

There is also a 5% beneficiary benefit, should you pass away. Your selected beneficiary will continue to receive residuals equivalent to 5% of the gross commissions of your recruits for as long as your recruits are producing commission to their EXIT broker.

Let me end this long and painful read for you by saying - if this is a new concept for you, at least learn more about it in your decision process. When you select the right broker, this just might be a very useful 'peace of mind' benefit for you. It certainly helps smooth out some of the bumps in your income. When your sales are off, you may still receive residual income that keeps your family going until your next closing. You can read more at my web site and even watch a video, just CLICK here and hopefully you will find some useful information.

Like I have told you earlier in this series, ask lots of questions. You can even leave comments or questions on this blog and I will reply on-line.

What is next? Real Estate Careers (Part 4 - Other Stuff to Consider). Watch for the next blog around Monday (11-10) or Tuesday. And I promise to talk more about your status as an Independent Contractor. What does that mean anyway?

(Career information at EXIT Upward Realty Click here.)

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