fbpx

A Shout Out to Dan Sullivan and The Strategic Coach

Dan Sullivan, founder of the entrepreneurial coaching firm Strategic Coach, says that successful entrepreneurs enjoy four freedoms.  The freedom of ‘time’, the freedom of ‘money’, the freedom of ‘relationship’, and the freedom of ‘purpose’.  So, what might these four freedoms look like for a real estate professional?

The Freedom of Time

The freedom of ‘time’ means that you are in control of your day.  We all heard that becoming a Realtor® would allow us to work when and how we want to, but at the end of the day, how many of us have control over our time?  Whether because we feel financial pressure to be on duty all of the time or we lack the team and support to allow us to focus on what we know we should be doing – instead of what we feel obligated to do – our time is not always our own.  

The Freedom of Relationship

The freedom of ‘relationship’.  How many times has our confidence been depleted by working with people we just flat out do not enjoy working with because we have no other choice?  Freedom of relationship means you work with and work for only the people that support and appreciate all you have to offer.

The Freedom of Money

What about money?  Yes, the real estate industry offers unlimited income potential.  But let’s be honest, if you lack the resources to claim your share of that income real estate pays pretty poorly.  ROOST Real Estate Co. is structured so that our agents are able to achieve the highest overall compensation in the area by making sure everyone focuses on what they do best – every day.

The Freedom of Purpose

Which brings us to ‘purpose’.  Why did you get into this business?  Most of us want to help people make the big moves in their lives.  We want to be heroes to our clients with every transaction. Our purpose is clear, to help people live the way they want to live today.  When your purpose engages with your ability to help people the money follows.

“With ROOST Real Estate Co., I want to offer a compelling alternative to the way most agents and brokers experience this business on a day-to-day basis. I see no point in being in this business if it doesn’t allow for a superior way of life. There is way too much risk, hard work and heartache to do it if there isn’t a big payoff. “

~ Chris McAllister

Care to Learn More?

Care to learn more about how we approach our business, and relationships with real estate professionals? Visit us at www.PartnerWithRoost.com

This article originally appeared in Forbes.

Consider this hypothetical real estate opportunity: A property owner approaches you with a house he or she is trying to sell in Cincinnati, Ohio. They tell you to take a look at it and make an offer. Knowing this area of Cincinnati is hot right now and rents are rising, you tell the owner you would be happy to take a look. You expect to make an all-cash offer for the property.

But before you make this offer, you need to crunch the numbers. As the founder of a real estate company that works with investors looking to rent their properties, I’ve seen that the arithmetic of investing is deceptively easy: Rent minus the vacancies, repairs, taxes, insurance, utilities and management equals your profit. Be cautious, but do not get caught in “analysis paralysis.” If investing were risk-free, everyone would do it.

Take a deeper look at this theoretical opportunity in Cincinnati to see how you can learn to “buy the numbers” before you buy a house.

Walk the property.

Once inside the Cincinnati home, you see that the house is in good shape, but it needs $10,000 or so in cosmetic updates. You figure that with these updates you should be able to rent the property for $1,200 a month. You check online to see what similar homes in the neighborhood are renting for, and your research confirms your estimate.

How to do it yourself: For every property in which you’re considering investing, physically walk through it. Unless you have an agent you trust on the ground, do not buy an investment property based on pictures or simply the information you’ve gathered online.

Estimate vacancy and repair costs.

Because of the demand in the Cincinnati area, you forecast a vacancy rate of only 5% of the collected rent. The home has no carpet, just hardwood floors throughout. After your initial rehab, the ongoing maintenance should be minimal. Based on this, you feel comfortable budgeting repair and maintenance costs at 10% of the collected rent.

How to do it yourself: Investors (myself included) almost always underestimate the cost of initial repairs and ongoing maintenance. To save yourself some grief, increase your estimate by 20%. When determining your potential vacancy costs, do your research. Real estate databases can be helpful, but remember that these websites are far from perfect. Use them as another data point when estimating values or collecting market rate rent information.

Estimate ‘other’ costs.

When considering the house in Cincinnati, a quick visit to the county auditor’s website tells you the taxes for the home are $1,800 per year (or $150 per month). Your insurance agent tells you that you should expect to pay $900 a year or so for insurance coverage. Because this is a single-family home, the tenant will be responsible for all utility bills.

How to do it yourself: Don’t overlook the obvious. Check out the auditor’s website that serves your property’s area to confirm property taxes, and make a call to the auditor’s office as well to be safe. Every market is different when it comes to insurance, so ask your insurance professional for a worst-case estimate based on the actual address.

Create a property analysis.

This Cincinnati property would likely make around $8,100 per year. You might have also found that the property is forecasted to appreciate 3% this year, so you decide, based on the strength of the market, an annual operating return of 8% would be acceptable. Based on these facts, you value the property at $101,250.

You anticipate that your total return on investment at this price will be 11% (8% return on investment plus 3% appreciation). There might also be significant income tax savings to be captured, depending on your personal financial situation. You do not wish to pay a premium for the expected appreciation, so the hoped-for 3% annual increase in the value of the property will be a bonus to you. To find the value of the rehabilitated property, divide the $8,100 annual return by the required return on investment (ROI) of 8%, which equals $101,250.

Your property analysis will look something like this:

Cincinnati Purchase
Single-Family Home
Potential RentMonthlyAnnually
$1,200$14,400
Vacancy Reserve 5%-$60-$720
Repair Reserve 10%-$120-$1,440
Insurance:-$75-$900
Property Taxes:-$150-$1,800
Interest Expense$0$0
Water$0$0
Trash/$18 Per Unit$0$0
Mowing/Average Over 12 Months$0$0
Professional Management 10%-$120-$1,440
Total Expenses-$525-$6,300
Net Profit$675$8,100
Value based on an ROI of 6%$135,000
Value based on an ROI of 8%$101,250
Value based on an ROI of 10%$81,000
Estimated Appreciation:3%

Negotiate wisely.

You now know the maximum you should pay for the property in Cincinnati is $91,250 (the $101,250 value minus the $10,000 you are planning to use for cosmetic updates immediately after purchase). You decide to open negotiations at $80,000. Regardless of where the negotiations end up, you are in a powerful position because you are working with hard facts.

How to do it yourself: When it’s time to make an offer and negotiate a price, determine the maximum price you should pay by deducting the costs of renovations from the value of the property. You can make an informed decision to either move forward with the best deal you can make or wait for the next opportunity to come along.

In the end, remember a few dos and don’ts.

Even the most successful investors get excited about new opportunities. But it’s important to keep your excitement in check by always keeping a few things in mind:

Do:

• Stay calm, and collect your data.

• Err on the side of caution.

• Set your boundaries — and stay within them.

Don’t:

• Be intimidated by the process.

• Let the excitement of the opportunity cloud your better judgment.

• Feel forced to respond before you are ready.

In my experience, these tips, tricks, tools and mindsets can help you make logical and financially sound business decisions about your existing or future investments. Math is not everyone’s cup of tea, but it is a language we must learn to converse in to be successful in real estate. “Buying the numbers” is just as important as buying the property itself.

You’ve decided to sell your home! 

When selling, it’s important to look at your home from a different perspective – that of a prospective buyer.  You want to make your house is as attractive as it can be.  The Home Enhancement Checklist provides you with insight and direction on how to get the most money and quickest sale for your home by making minor changes and repairs.

The Big 4

Here’s how it’s done:

1. Tidy Up.                                                                                                                    

When a home appears cluttered, buyers can’t “see” the home or it’s potential. By storing items you don’t need or use, your home will feel more inviting to potential buyers. When selling a home, less is more!

2. Clean Up.

A Clean home gives the impression that it has been well cared for. Strive to make your home visually and aromatically appealing. Remember: Paint in the can is worth $20, but it’s worth $1,000 on the wall!

3. Patch Up.

Minor repairs often become major stumbling blocks for potential buyers. Take away those distractions by fixing minor issues before they become major.

4. Finishing Touches.

The little “extras” make a home feel special. Remember, your home is competing with others in your neighborhood. Make your home stand out!

A black grate covers a white brick fireplace near the front door of the home.

Our Gift to You

Click here to download your free copy of The ROOST Home Enhancement Checklist. Care to learn more?  Visit us at www.ListWithROOST.com and invite us out to talk about your next big move.

Is Flipping Really Investing?

My definition of real estate investing is buying and renting for the long term.  Flipping is also considered investing by many people, but I consider flipping houses to be a construction or construction management business at best, and simply speculation at worst.  Flipping is 100% about buying a property at the right price, completing any necessary repairs and upgrades as quickly and cost-effectively as possible, and then selling to the highest bidder. 

I Consider Flipping a Risky Business

In my mind flipping houses carries more financial risk and pressure than buying and renting, but that does not mean selling a property from time to time does not make sense.  If you can cash out a property and use the proceeds to invest in a new property with a greater return, then yes by all means sell.  My investing strategy is about taking the long view.  I buy for cash flow and not short term gains.

Real Estate is NOT a Liquid Investment

Investing in real estate is different from investing in other asset classes like stocks and bonds because it is not liquid.  In other words, real estate cannot be converted to cash on short notice.    The need to cash out quickly could lead to selling at a price that wipes your projected profit or even your principle.

I Like a Bit More Control

Today, there are many more external forces that can affect housing in the short and medium term.  In our hyper-connected financial, social, and 24 hour a day news world, a hiccough in another country can affect or delay the sale of your flip house. A federal government shutdown that drags on past a few days plays havoc with the local and national economies and is completely beyond our control.  And of course, if financing is involved, every day on the market costs money.

I Have Enough to Worry About

People’s reactions to news may not be rational but we all consider either consciously or subconsciously how and to what degree an unexpected event will affect our jobs.  From a buyer’s perspective, committing to a 30 year mortgage is a big deal, and harder to do if there is even a chance that your income could be in jeopardy.  Yes, I may be overly cautious at this stage of my life, but this approach allows me to be less concerned about the short and medium term market value of my property.

There Is No ‘Right Way’

There are many ways to make money in real estate.  Just because my risk tolerance is lower than yours does not mean my way is superior.  I do however, want you to consider all of the possible ramifications of the path you choose.  

What Are Your Investor Mindsets?

Are you interested in diving deeper in to your personal mindsets and motivations as a real estate investor?  Set aside 15 minutes and complete the Making Real Estate Work Mindset Scorecard.  You will get instant results and insights to your own personal view of the business you may not even be aware of.  For more information about The ROOST Landlord Advantage™ property management system, visit us at www.ManageWithROOST.com

manage sore yourself
Score Yourself – Make Real Estate Work

As an added bonus, once you complete the scorecard you will receive a free book called Your Make Real Estate Work Mindset Scorecard – 8 Real Estate Investment Mindsets Growing or Slowing Your Business Right NowI guarantee this easy to read pdf will give you a lot to think about. 

Agent Client Touch Points  

Just as we have identified client touch points for our customers and clients, we have identified touch points and ‘moments of truth’ for agents – who are our most important clients. Client touch points in the agent recruiting and retention process occur from the moment an agent becomes aware that we exist, and, continue throughout our (hopefully) career-long association with that agent.  

More often than not new agents come to us through a referral from an existing agent. In a new market however, we want to set the stage for a prospective agent will ‘discover’ us through a google search, a social media post, or possibly a targeted email to a select group of agents in a given market.  Our goal is to make it possible for our right-fit candidates to find us.  If they discover us organically, they own the experience and it is their victory.

This following is not a definitive list, you will likely add many more opportunities to make a difference.

A Real Estate Agent’s Guide to the Good Life Videos

Real Estate Agent's Guide to the Good Life

Our marketing plan for recruiting new agents was originally outlined in my 2015 book A Real Estate Agents Guide to the Good Life – What You Should Expect from Your Brokerage. 

Once I put the book out there in our primary markets and on Amazon.com, I quickly realized that getting agents to read it, even my own, was not going to be easy.  Even at less than 10,000 words, it was not something very many people wanted to plow through in their spare time.  I even put a free downloadable version on our website but had very few takers.

Weekly Videos

So, I had the bright idea that I would break the book down into weekly, easily digestible bite-size pieces and release it weekly on social media.  Our social media partners, Levi and Shayna Wiggins, suggested that we also create short weekly videos to complement the blog posts.  I re-wrote the book during the summer and fall of 2016 as a series of 48 blog posts.  Levi and Shayna further edited my work down to 60 to 90 second scripts, then created, and narrated, 48 animated videos.  

The videos are very simple but hold the viewer’s attention in such a way that 60 to 90 seconds flies by.  We publish a new one every week on social media.  We will continue to update and reposition the content annually to keep weekly communication fresh and to catch new eyes over time.  This is one way we are creating client touch points on line and new opportunities to make connections.

Post Card Content

We also created a series of 12 recruiting post cards featuring our agents and key points from the book.  We mail these to our recruiting ‘hit-lists’ in each market we operate in.  We use the same content to create emails that we send out monthly to a broader group of local Realtors.  

Our Best Candidates Are Referred by Our Agents

It should come as no surprise that our best agent candidates are referred to us by our existing agents.  I am always happy to schedule an appointment with almost anyone that wants to talk to us about our company, but I always ask them to read A Real Estate Agent’s Guide to the Good Life – What You Should Expect from Your Brokerage.   first.  Anyone who reads the book and still honors our appointment, is almost always pre-sold on what we have to offer.  If the book resonated with the prospective agent at all, they want to learn more.  If the book is perceived as an obstacle to whatever that agent’s personal goals are, they screen themselves out.

Even if the meeting goes well there is generally a lengthy courtship process because successful agents are busy earning a living and any move, even a good move, will disrupt their business to some degree.  There is also the issue of ending their relationship with their current broker.  Even in less than satisfying relationships, breaking up is hard to do.  That is why it is critical to keep the good will of the make or break moment / meeting alive by staying in touch online and in person.

The Candidate Screening Process

One of the recruiting tools we have in development is called The Market Maker Advantage Mindset Scorecard.  This marketing and screening tool, available for view at  www.MarketMakerScorecard.com  is one of a series of marketing ‘scorecards’ we are developing for agents, buyers, sellers, property management clients, staff members, and prospective ROOST and Lucky Town franchisees. The beauty of the scorecard is that within ten to fifteen minutes, a prospective agent will know intuitively whether they belong with us or not.  Depending on how they score, we know too.

The Online Agent Attraction Strategy

Our marketing funnel for attracting new agents to our company consists of four parts.  They are reach, engage, activate, and re-engage. In the reach stage, we are casting the widest net to reach all possible people who self-identify as Realtors.  We can target our online marketing activities to specific geographic areas.

The engage stage involves establishing a relationship with those people whom we identified in the reach stage.  They are watching our videos and following us on social media.  In this stage of the marketing process, we hope to see them download a free e-book version of A Real Estate Agent’s Guide to the Good Life from the www.CareerWithROOST.com website. 

In the activate stage, we hope to be communicating directly with Realtors looking for a new brokerage.  These people will be our best qualified prospects and we hope to engage them through the scorecard, and hopefully a phone call, and even a meeting.  At this stage, we want to mail them free copies of all of our recent publications and some ‘swag’ like a t-shirt or mug.  

At this point we hope to seal the deal with the prospect joining our company.  However, timing is everything and sometimes the courtship process is longer than we would like.  The ‘re-engage’ stage is essentially outside the funnel and is an incubation period where we hope to stay connected with the prospect through social media and target emails with information and updates about our company.  The goal is to get these Realtors back to the activation stage.

Your Brokerage for Life

Just as I want to attract clients to our brand and retain them throughout their lives, I want the same for our agent and broker relationships.  A great relationship starts with attracting someone who is personally aligned with our brand values and aspirations.  The relationship grows over time as we continuously add value to an agent’s business and life.      

As the needs of an agent change over the arc of their career, we will adapt, change, and develop whatever new capabilities we need to support them.  We will be there from the day they pass their real estate license exam, sell their first house, hire their first assistant, assemble their first team, all the way to the point where they decide to sell their business or just slow down a bit.  

Ours is a business relationship, but no matter how much we like to kid ourselves, our business is personal.  When we find a good match in an agent, our hearts get thrown in too.  There is respect, admiration, and love at the core of what we do.  Ours is a relationship where we expect each other to bring the best we have inside us to our profession every day.  It is the heart and a mutual commitment to each other’s success that sustains our relationships over time.

Your Recruiting Success is Our Recruiting Success

Care to learn more about how we help our broker / partners build their businesses?  Check us out at www.PartnerWithROOST.com.  And – we’ve got a scorecard for you too!  Take 15 minutes and complete the scorecard at www.ProfitabilityScorecard.com and get a free download of my e-book Your Broker Profitability Partnership Mindset Scorecard – 8 Real Estate Broker / Owner Mindsets Growing or Slowing Your Business Right Now.  Finally, connect with me directly at Chris@RealEstateBrandsLtd.com.  

~ Chris McAllister

The Three Most Common Ways Investors Make Money

There are a multitude of ways to make money in real estate. Here are the three most common that I and my clients are the most familiar with:  

Buy and Hold

When I started buying rental properties, I really did not have a strategy beyond purchasing what I considered middle-market properties that commanded average to above average rents at the time. My goal was to buy in established working class neighborhoods. I was not looking to buy and rent low-end properties nor was I looking to buy and rent high-end properties. I was able to finance my first few properties with 20% down at a local bank as these properties were in good condition at the time of purchase.

A short while later, when my first partner and I started buying together, we had even less of strategy. We simply bought everything we could with bank financing and as little of our own money as possible. As you already know this ended badly, but I digress. The bulk of my portfolio today consists of paid off, or soon to be paid off, properties that I rent out for the long term. I like the annuity-like cash flow these properties provide.

Buy and Flip

Around 2006, another partner and I found a sweet spot where we could buy foreclosed properties on the open market inexpensively. We would then have them repaired to the standard suitable for FHA or VA financing, and then list and sell them through my brokerage.  

Our strategy here was to buy anything that we thought would yield us a profit of at least $20,000. This worked for quite a while and may be a viable strategy where you are today. When the market began to cool in 2007 and 2008, we could no longer easily sell our houses outright, so, we began offering our houses for rent.

Buy and Sell Land Contract or Offer Seller Financing

Buying a home, rehabbing it if necessary and then selling it to a willing and able buyer via land contract or seller financing is a fantastic strategy in an appreciating market. Selling houses via land contract makes less sense in a stable market or an economic environment where property values are falling. Here are the Wikipedia definitions of Seller Financing and Land Contract which give pretty good explanations.

One Way These Deals Can Be Structured

Seller financing or land contract deals are often structured so that the payments are based on a long term amortization schedule. For instance, a buyer will make monthly principle and interest payments based on a 30 year mortgage. They also generally require the balance of the loan to be paid back as a balloon payment in say two to five years. On or before the date the balloon payment is due, the buyer will presumably obtain a traditional mortgage and ‘cash’ the seller out.

In an appreciating market the likelihood of a successful cash out to the investor is very high. In a stable or depreciating market there is the chance that the property will not appraise at the agreed upon price and the sale will fall apart or at best have to be restructured.

How Everyone Involved Can Win

The advantage of selling houses this way in an appreciating market is primarily because all parties stand a great chance of coming out ahead on the deal. The investor is able to sell the home at an anticipated two or three year value based on the current appreciation trend. The buyer is able to get into a new home today even though he may not be credit worthy in the eyes of a mortgage broker.  

A great deal is structured so that everybody benefits from market appreciation. A smart investor will structure a deal so that there is a good chance the buyer’s ultimate cash out price at the end of the term is somewhat below market. When that happens, everybody involved wins.

A Great Market Right Now For These Deals

I have created a business plan for investors interested in buying, rehabbing and selling houses via land contract in Melbourne and Palm Bay, Florida – The Space Coast area of Florida. The population of the Space Coast is exploding, mainly due to the growth of the aerospace industry. Values are steadily increasing, and many new arrivals need a seller financing opportunity because they are two or three years away from qualifying for a mortgage on their own.  

3 Ways to Learn More

  1. If you would like a free download of my E-Book called Investing in the Space Coast of Florida, you can download it here:

2) For more information about the ROOST Landlord Advantage™, click here:

3) Are you interested in diving deeper into your personal mindsets and motivations as a real estate investor?  Set aside 15 minutes and complete the Making Real Estate Work Mindset Scorecard. You will get instant results and insights to your own personal views about real estate investing you may not even be aware of.

As an added bonus, once you complete the scorecard you will receive a free book called Your Broker Profitability Mindset Scorecard – 8 Real Estate Career Mindsets

Your Pay Your Way™

This post is designed to offer some insight into one of the ways we approach our relationship with our Realtors® – our compensation strategy.  Your Pay Your Way™ is designed to be transparent, easy to understand, and most of all flexible.  It is designed to support both the goals of the agent, the brokerage, and the ROOST Real Estate Co. mission and brand values.

We want to be the first and last brokerage our agents work with.

ROOST Real Estate Co. is a full service brokerage that strives to offer the highest level of service possible to both buyers and sellers.  We are a relationship focused business eager to create clients and referral sources for life.

Anytime an agent puts themselves through the emotional upheaval of changing brokerages, they are taking a leap of faith that their new broker has their best interests and goals at heart.  

Over the course of a career an agent is going to pay their brokerage tens of thousands of dollars in the form of expenses, fees, and splits.  Personal, emotional, and financial commitments of this magnitude deserve the very the best the broker owner and ROOST Real Estate Co. can offer.

We at ROOST™ are always looking for ways to express our gratitude and appreciation to our agents for choosing us.  Ours is a relationship with our agents. We are not interested in a simple series of transactions.

What are the actual costs of doing business at ROOST?

The first commitment a broker has is the ROOST Monthly Franchise and Marketing Fee.  This money is used by ROOST Real Estate Co. to continue to expand the brand through social and other electronic media, upgrade our marketing materials, and to keep the brand fresh and forward thinking.  This fee is equal to 5% of sales and is payable by the broker monthly to ROOST Real Estate Co.

This fee is capped through year 2022 at 5% of gross agent sales or a maximum of $5,000 per agent per year.  And, unlike the national franchises, ROOST does not collect transaction fees or annual dues of any kind.

The second commitment the Broker has is The Shared Office Expense.  This fee is collected to cover the overhead of the physical office space including, rent or mortgage payments, office equipment, phone services and all of the things required to maintain a business.  This fee is equal to 5% of sales and is retained by the broker.

This fee is also capped through 2022 at 5% of sales per agent per year to a maximum of $5000.

The third commitment the Broker has is to the Administrative Staff including the Agent Business Manager(s) or ABM’s.  Whether an office has 50 agents or 5 agents, administrative functions have to be completed by someone and even if this is done in the early days by the broker himself, there is a cost involved.  This fee is equal to 5% of sales and is retained by the broker.

This fee is also capped through 2022 at 5% of sales per agent per year to a maximum of $5,000.

The fourth commitment the Broker has is to The Basic Agent Service and Technology Package.  We want our agents focused on working with buyers and sellers.  We do not want our agents doing basic marketing and promotion, setting up showings, or filling out contracts with pen and paper.  The Basic Service and Technology Package is a commitment from your broker to provide the following:

The actual cost of these services to the brokerage runs from $400 to as much as $600 per month per agent depending on location.  There is also a tremendous amount of time involved in working with agents to get the full benefit of the Basic Agent Services and Technology Package.  

This fee is also capped at $5,000 a year or 5% of sales through 2022.  In our experience agents who take advantage of these services see an immediate increase in productivity of 15 to 20%.

The Fifth Commitment is to the Broker/Owner Herself – The Broker Service Fee.  Every fee we have defined so far exists to cover the cost of owning and operating a brokerage.  Every entrepreneur expects a return on their investment of time and capital. ROOST broker owners are no different.  This is where the Broker Service Fee comes in.

As you will note above, the monthly Franchise and Marketing Fee, the Shared Office expense, the Administrative Staff fee, and the Basic Agent Services and Technology Package add up to 20% of every commission dollar earned by an agent.  However, the most an agent will ever pay in any calendar year for these fees is $20,000 regardless of how much they earn.  These fees are capped to cover actual costs and no more.

The Broker Service fee is equal to 10% of every commission dollar earned by every agent.  There is no cap on this fee. Whether an agent earns $100,000 or $1,000,000 over the course of the year, the brokerage will retain 10%.  We structured our fees this way to ensure the broker owners are rewarded and motivated to support elite producers regardless of their volume.

Our Financial Goals for All of our Agents

We want to see every one of our agents earn at least $100,000 in commissions each year.  If that agent is on a 70/30 split, they are paid $70,000 and the brokerage retains $30,000.  

What if this agent has a great year and hits their $100,000 sales goal at the end of September and still has several closings in the last quarter of the year?  Once the brokerage gets to $30,000 the agent keeps 90% of every dollar they earned for the rest of the year. This compensates the agent at or above the industry average and allows the brokerage to continue to grow, upgrade, and offer new services over time.

For the New Agent

For a new agent just starting out, we offer full service and support with a 60/40 split.  60 percent of every dollar the agent earns is paid to the agent and 40% is retained by the brokerage.  The agent is responsible for their monthly MLS(s) fees and a monthly Errors and Omissions Insurance fee of $30 per month.

The ‘Power’ Agent

Agents with a proven track record earning in excess of $150,000 per year may negotiate up to a 90/10 split with the monthly Franchise and Marketing Fee, the Shared Office expense, the Administrative Staff fee, and the Basic Agent and Technology Services Package covered with an additional monthly payment. The agent is responsible for their monthly MLS(s) fees and a monthly Errors and Omissions Insurance fee of $30 per month.

The Team Leader

ROOST Real Estate Co. is also the best place for teams to set up shop.  10% of commission dollars earned by team members are retained by the brokerage and the Team Leader pays a negotiated monthly fee for the Franchise and Marketing Fee, Shared Office expense, Administrative, and Basic Agent Service and Technology Package fees to the broker/owner. The Team Leader is responsible for their team members’ monthly MLS(s) fees and a monthly Errors and Omissions Insurance fee of $30 per month.

Whether you are new to the business, an experienced professional, or a team leader looking for the best possible brokerage to build your business with, ROOST Real Estate Co. has a compensation plan and fee structure that grows with you as your business grows.

Getting Started

ROOST provides every agent with their first 12 yard signs, 1000 business cards, and a www.ROOSTRealEstateCo.com landing page.  When you are ready – we will be too.  Give us a shout.

Your future awaits.

Care to Learn More?
Care to learn more about how we approach our business, and relationships with real estate professionals like yourself? Visit us at www.ROOSTRealEstateCo.com.  

I had the privilege of joining Dean Jackson’s Podcast, discussing the unique value of the ROOST Real Estate Co. model.

Reprinted from ListingAgentLifestyle.com

Today on the Listing Agent Lifestyle podcast we’re talking with Chris McAllister from Roost Real Estate in Columbus, Ohio, and this show has a really different approach because Chris brings up a really interesting point.

Most traditional real estate companies focus on only part of the picture, the people who are buying and selling. In reality, there’s a good percentage of people who are renting homes, so Chris has shifted his focus to not only the transaction of real estate, but the bigger, broader picture of shelter.

We had a great conversation because that opens up so many other opportunities in terms of investors, property management and all the revenue streams that are possible by representing 100% of the shelter business.


Well – Sort of.

Our services to you as your buyer’s agent are absolutely FREE!  I however lied about the working for free part. But please, let me explain.

We Work on Commission

It is important to know that Real Estate Agents and Brokers do not receive a salary or hourly wage of any kind.  We are paid 100% on commission. We get paid when a transaction closes.

We Are All Realtors – But We Work For Different Companies

Regardless of what real estate firm we work for, we are all Realtors.  This means we all belong to the National Association of Realtors, as well as our local and state Realtor boards.  However, we all work for different independent real estate firms licensed in the state we do business.

We All Work Together

As Realtors, we offer each other compensation for finding buyers for each other’s listings.  We do this through an online real estate marketplace called the Multiple Listing Service or the MLS for short.  The various multiple listing services across the country also supply the raw data to Zillow and Realtor.com – but that’s another blog post.

You Found Your Dream House And Decide to Go For It

Let’s say you have agreed to purchase a home listed with ‘Nationwide Realty’ for $100,000.  When the seller listed their house, they signed a listing contract with Nationwide Realty where they agreed to pay a commission of 6% or $6000 at closing for selling their home.  (Please note – all real estate commissions are negotiable, and this is simply a hypothetical example.)

Here’s How We Get Paid

It all can seem a bit complicated, but we think it is critical that we are 100% transparent about the way we work, and the money involved.

Ready To Get To The Fun Part?Check us out at www.BuyWithROOST.com and request a FREE buyer consultation today.  You can also get a head start by downloading our Buy With ROOST™ brochure here.    

Your Pay Your Way™

This post is designed to offer some insight into one of the ways we approach our relationship with our Realtors® – our compensation strategy.  Your Pay Your Way™ is designed to be transparent, easy to understand, and most of all flexible.  It is designed to support both the goals of the agent, the brokerage, and the ROOST Real Estate Co. mission and brand values.

We want to be the first and last brokerage our agents work with.

ROOST Real Estate Co. is a full service brokerage that strives to offer the highest level of service possible to both buyers and sellers.  We are a relationship focused business eager to create clients and referral sources for life.

Anytime an agent puts themselves through the emotional upheaval of changing brokerages, they are taking a leap of faith that their new broker has their best interests and goals at heart.  

Over the course of a career an agent is going to pay their brokerage tens of thousands of dollars in the form of expenses, fees, and splits.  Personal, emotional, and financial commitments of this magnitude deserve the very the best the broker owner and ROOST Real Estate Co. can offer.

We at ROOST™ are always looking for ways to express our gratitude and appreciation to our agents for choosing us.  Ours is a relationship with our agents. We are not interested in a simple series of transactions.

What are the actual costs of doing business at ROOST?

The first commitment a broker has is the ROOST Monthly Franchise and Marketing Fee.  This money is used by ROOST Real Estate Co. to continue to expand the brand through social and other electronic media, upgrade our marketing materials, and to keep the brand fresh and forward thinking.  This fee is equal to 5% of sales and is payable by the broker monthly to ROOST Real Estate Co.

This fee is capped through year 2022 at 5% of gross agent sales or a maximum of $5,000 per agent per year.  And, unlike the national franchises, ROOST does not collect transaction fees or annual dues of any kind.


The second commitment the Broker has is The Shared Office Expense.  This fee is collected to cover the overhead of the physical office space including, rent or mortgage payments, office equipment, phone services and all of the things required to maintain a business.  This fee is equal to 5% of sales and is retained by the broker.

This fee is also capped through 2022 at 5% of sales per agent per year to a maximum of $5000.

The third commitment the Broker has is to the Administrative Staff including the Agent Business Manager(s) or ABM’s.  Whether an office has 50 agents or 5 agents, administrative functions have to be completed by someone and even if this is done in the early days by the broker himself, there is a cost involved.  This fee is equal to 5% of sales and is retained by the broker.

This fee is also capped through 2022 at 5% of sales per agent per year to a maximum of $5,000.

The fourth commitment the Broker has is to The Basic Agent Service and Technology Package.  We want our agents focused on working with buyers and sellers.  We do not want our agents doing basic marketing and promotion, setting up showings, or filling out contracts with pen and paper.  The Basic Service and Technology Package is a commitment from your broker to provide the following:

The actual cost of these services to the brokerage runs from $400 to as much as $600 per month per agent depending on location.  There is also a tremendous amount of time involved in working with agents to get the full benefit of the Basic Agent Services and Technology Package.  

This fee is also capped at $5,000 a year or 5% of sales through 2022.  In our experience agents who take advantage of these services see an immediate increase in productivity of 15 to 20%.

The Fifth Commitment is to the Broker/Owner Herself – The Broker Service Fee.  Every fee we have defined so far exists to cover the cost of owning and operating a brokerage.  Every entrepreneur expects a return on their investment of time and capital. ROOST broker owners are no different.  This is where the Broker Service Fee comes in.

As you will note above, the monthly Franchise and Marketing Fee, the Shared Office expense, the Administrative Staff fee, and the Basic Agent Services and Technology Package add up to 20% of every commission dollar earned by an agent.  However, the most an agent will ever pay in any calendar year for these fees is $20,000 regardless of how much they earn.  These fees are capped to cover actual costs and no more.

The Broker Service fee is equal to 10% of every commission dollar earned by every agent.  There is no cap on this fee. Whether an agent earns $100,000 or $1,000,000 over the course of the year, the brokerage will retain 10%.  We structured our fees this way to ensure the broker owners are rewarded and motivated to support elite producers regardless of their volume.

Our Financial Goals for All of our Agents

We want to see every one of our agents earn at least $100,000 in commissions each year.  If that agent is on a 70/30 split, they are paid $70,000 and the brokerage retains $30,000.  

What if this agent has a great year and hits their $100,000 sales goal at the end of September and still has several closings in the last quarter of the year?  Once the brokerage gets to $30,000 the agent keeps 90% of every dollar they earned for the rest of the year. This compensates the agent at or above the industry average and allows the brokerage to continue to grow, upgrade, and offer new services over time.

For the New Agent

For a new agent just starting out, we offer full service and support with a 60/40 split.  60 percent of every dollar the agent earns is paid to the agent and 40% is retained by the brokerage.  The agent is responsible for their monthly MLS(s) fees and a monthly Errors and Omissions Insurance fee of $30 per month.

The ‘Power’ Agent

Agents with a proven track record earning in excess of $150,000 per year may negotiate up to a 90/10 split with the monthly Franchise and Marketing Fee, the Shared Office expense, the Administrative Staff fee, and the Basic Agent and Technology Services Package covered with an additional monthly payment. The agent is responsible for their monthly MLS(s) fees and a monthly Errors and Omissions Insurance fee of $30 per month.

The Team Leader

ROOST Real Estate Co. is also the best place for teams to set up shop.  10% of commission dollars earned by team members are retained by the brokerage and the Team Leader pays a negotiated monthly fee for the Franchise and Marketing Fee, Shared Office expense, Administrative, and Basic Agent Service and Technology Package fees to the broker/owner. The Team Leader is responsible for their team members’ monthly MLS(s) fees and a monthly Errors and Omissions Insurance fee of $30 per month.

Whether you are new to the business, an experienced professional, or a team leader looking for the best possible brokerage to build your business with, ROOST Real Estate Co. has a compensation plan and fee structure that grows with you as your business grows.

Getting Started

ROOST provides every agent with their first 12 yard signs, 1000 business cards, and a www.ROOSTRealEstateCo.com landing page.  When you are ready – we will be too.  Give us a shout.

Your future awaits.

Care to Learn More?

Care to learn more about how we approach our business, and relationships with real estate professionals like yourself? Visit us at CareerWithRoost.com!