How to properly incentivize a real estate investor assistant

Question

Hi All,

Wanting to get some feedback on how I should incentivize an assistant I'm wanting to hire.  They will primarily be cold calling for me and setting me appointments as well as door knocking, sending out mailers, putting out bandit signs etc.

I don't want to pay a base because I find people get lazy and comfortable so I'm planning on making this strictly results based and want some feedback on what is fair for a qualified seller appointment? I am also planning on giving my assistant a percentage of the deal on the backend depending if I list the property for sale, wholesale it or flip it, but not sure what percentage would be fair. I don't want to give away too much but I also don't want to make it too little to where they won't be hungry to go and hunt for the next deal. I'd appreciate any feedback and if there are agents/investors who have previously hired an assistant with this type of structure I would be interested in hearing your thoughts. TIA

Corey Conklin · Answer

@Steve Meyers My fault I should have been more clear on the splits. I was figuring them getting paid on your net commissions after paying for the brokerage fees, signs, flyers, and any other resources needed to close the deal not on the gross commissions.

The only reason I would pay them so well, personally, is because I hate doing every task you are asking them to do with the greatest of passions. So for me to avoid those tasks and being able to focus on meeting with clients and closing deals (which I really enjoy) it would be worth every penny. If they were really good at bringing in quality leads in all (3) areas of your business that would be a huge win.

I don't think I would pay them hourly but if I did I would have to be diligent and provide clear KPI's that need to be hit daily, weekly, monthly. It would take a lot of work to manage. But if you are able to manage that you could potentially keep more of your profits.

I live in Kansas so what makes sense for hourly wages here may not make sense in your area so it's hard for me to provide a solid hourly wage number for you.

Steve Meyers · Answer

@Corey Conklin thanks for the input.  And yes that is a great question which I've already outlined to both of the guys I plan to bring on and they see the value so I don't think there is an issue there with what I bring to the table with experience and knowledge.  They are both rookies when it comes to real estate and definitely do need guidance.  50% of my commission is crazy in my opinion seeing as I'm the one doing the showings and all the leg work and they are just setting the appt.  On top of that I'm paying out my brokerage fees too, they're making more than I would on the deal, which doesn't make much sense to me.

What do you feel would be a fair hourly wage and amount per deal to pay an assistant whose primary job will be to cold call, send out mailers, drive for dollars, put up bandit signs and doorknock?

Corey Conklin · Answer

@Steve Meyers Here are a few questions I have that I think are important.

Why should a motivated, go getter work for you? What do you bring to the table for the assistant that would make them want to hustle for you? Do you have a well known brand in your area that makes it easier to do their job? Or are you just another average real estate agent/investor in your area? Are you able to give them training, guidance, or mentorship?

You should start looking at what you can offer to the assistant and not just what they can offer to you.

Personally, for a great assistant that needs little guidance I would pay them 40-50% of your commission on sales/wholesaling and around 20-30% on the profits on your flips. I'd pay them more on the sales and wholesaling piece because that's easily something they could funnel to themselves if they are truly great at generating leads and cut you out completely. Flipping takes a lot more work on your end that isn't as easy to take on themselves. If you want to pay them less then you will probably need to find a rookie that will need much more guidance and mentorship, which comes at a cost.

I think your focus should be on how you can help make your assistant the most money possible and not be on paying them too much.

Richard Capers Jr · Answer

@Steve Meyers I wouldn't recommend paying a flat fee for appts set.  You could find yourself at non motivated seller appts quite often and your assistant's focus would shift.  To ensure they are setting high quality appts make sure you considers paying per close.

If you want to set an hourly rate plus closing bonuses that would work as well.

Steve Meyers · Answer

@Chris Seveney it all depends on the deal, if I'm looking at a condo vs a house it will be completely different.  They wouldn't be taking on risk but rather getting a percentage of the profits or commissions, depending if I list the property or flip it.  I was thinking of doing .5% mind you our average price point here in SD is about $850K so .5% of profits on a flip or commission would be fair I think. 20 deals a month is a lot for my market here.

I was also thinking of doing a flat fee of $100 per appt set but not sure if that might be too low?

Chris Seveney · Answer

@Steve Meyers

What size property you looking at and what profit you looking at?

If they are taking on risk based on only getting a lead I would want more upside than just a straight pay. I think offering a small hourly wage with bonus per lead and then bonus if deal closes is best win win as that way they are still incentivized to get the lead and make the calls.

I would flat fee it for $X dollars per lead and $500 for every deal that closes - assuming you are closing around 20 deals a month.