All Forum Posts by: Justin Stanford

Hi @Justin Stanford

It's very altruistic of you to want to incentivize them further, but I don't think that is necessary. And, I'd argue, you are actually doing them a disservice in some cases. In the case of giving the realtor the listing on a flip, that's a good idea. However, I would not give them a cut of my BRRRR. You are thinking too transactionally and not about the lifetime value of your relationship with them. If you are able to keep more money in your pocket, that just means more commissions for them down the road. They'll be compensated fairly over time, they don't need to be incentivized further on every transaction, as that will slow your ability to scale. If you truly want to incentivize your realtor, then offer JV opportunities. As for GCs, offer to pay them extra if they finish sooner than the agreed upon timeline. And that can work both ways. If they are beyond the agreed upon timeline, you can also have punitive incentives. I'm not saying to do the latter, but the extra pay for finishing early is always a good idea. Feel free to reach out if you need any further advice.

It's understandable to be concerned about coming across as more trouble and risk than you're worth as a new investor. However, offering a generous incentive plan for your buying agent can help motivate them to work with you and help you find good deals.

That being said, it's important to ensure that your incentive plan is sustainable and won't put you in a difficult financial situation. You don't want to offer incentives that are so high that you can't afford them, or that would require you to put your second and third deals on hold.

I suggest revisiting your budget and financial projections to determine how much you can realistically afford to offer as incentives. Additionally, you could have a conversation with your buying agent to get their feedback on the proposed incentive plan and whether they think it's reasonable.

Remember that building a good relationship with your buying agent is important, and being transparent and open about your financial limitations can help build trust and foster a positive working relationship.

Overall, offering incentives can be a powerful tool for building a strong team and achieving success in real estate investing. Just make sure to do your research, set realistic expectations, and communicate clearly with your team members.

It's great to see that you want to incentivize your core four team members. Offering incentives can help keep your team motivated and dedicated to your project, and it can also help you build long-lasting relationships with them.

Regarding your incentive plan for your buying agent, it seems like a reasonable approach to compensate them for their work on low-value properties. The first incentive for the BRRRR strategy is quite generous and can motivate your agent to help you find properties that have the potential to be refinanced for more than you spent on them. Just make sure to clarify the specifics of the incentive plan and put everything in writing to avoid any misunderstandings or conflicts later on.

For your contractors, one way to incentivize them apart from referrals is to offer bonuses for timely and quality work. For example, you could offer a bonus if the project is completed ahead of schedule or if they exceed your expectations in terms of quality of work. This can help motivate them to work efficiently and to a high standard.

In addition, you could offer loyalty bonuses or long-term incentives, such as a bonus after working on a certain number of projects with you. This can help build trust and loyalty with your contractors, and they may be more willing to work with you in the future.

Overall, incentivizing your core four team members is a great way to build a strong team and help everyone achieve their goals. Just make sure to communicate your expectations clearly and put everything in writing to avoid any misunderstandings.