The 3 most expensive financial mistakes that's costing real estate agents
thousands of dollars...
... and what to do about it.
#1 - Not being organized – Time management
Too many platforms - Prospecting – Lead Managing - Not knowing what your hour is worth
Today we have so many programs and apps you’ll notice that you have one client on multiple platforms. Throughout the process there’s so many places to look at your notes and too many calendars to manage that you don’t even know where to start. Every agent knows that the core of their business is referrals. Yet, very few agents have processes in place to manage their leads. Even when they do have processes in place it’s a strt and stop process. It’s not consistent.
If you simply don’t know how much time you’ve spent selling (buying) that house, you don’t know your margins. Therefore, you don’t know how to maximize the profit per hour.
SOLUTION - PROCESSES
Take the time and make yourself a processes handbook.
Have processes in place for:
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What platform you’re going to be using to keep track of your clients and prospects. If you have a CRM make sure you can text, call, email, and take notes on it.
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Schedule or a To-Do list. If you find it hard to finish your To-Do list put it on a schedule. This will force you to think about how long a task should take. If you’re always behind your schedule put it on a To-Do list instead and only have 3-4 items to focus on a day.
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Tracking your time. A simple GPS tracking on your phone will be able to tell you where you were and how long you were there. When working at your office or home focus on one project at a time to help you keep track and take a 5 min break in-between.
#2 – Cash Flow
About 80% of Real Estate Agents are what accountants call “struggle bunnies”. They sign up a client and then dump their own money into pictures, video, website, marketing, online ads, mailings, staging, open houses, and everything else. Just waiting for the potential pay day. Once the house sells they pay everything off and start the struggle again.
The standard business equation is:
Income – Expenses = Profit
But for most Real Estate Agents it’s something like this:
Expense + Income = Profits
SOLUTION – CASH FLOW ENGINEERING
Engineer a cash flow that works for you. It doesn’t even have to be one of those equations.
You can create your own equation.
#3 – Choosing the wrong entity
You might be an LLC under state filings. But, filing your taxes is a different story.
There are only 4 business entities.
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Sole Proprietorship
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Partnership
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S-Corporation
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C-Corporation
Each one has specific and unique tax savings. Sometimes you can even outgrow your entity.
SOLUTION – TAX PLANNING
Tax prep software, and even most professional tax preparers, do a fine job putting the right numbers in the right boxes on the right forms. But then they call it a day.
That’s like driving a car using just your rear-view mirror!
If you really want to pay less tax, you can’t settle for just recording last year’s history. You need someone who can help you write it – with a complete menu of proactive concepts and strategies that ordinary tax preparers overlook.
