Financial help for the self-employed real estate agent

Apr 21, 2020

Mortgage and rent relief, utility bill forbearance, and a sped-up unemployment compensation process are just a few of the forms of relief offered to Americans during the COVID-19 pandemic.

The list changes almost daily. Unemployment benefits, for instance, were recently extended to independent contractors under the CARES Act.

If you’re not working in real estate right now, which seems to be the prevalent situation across the country, we are offering up some ideas on how to deal with the lack of income during this period.

Let’s talk about that unemployment compensation

The official name for these benefits for the self-employed is “Pandemic Unemployment Assistance (PUA).” As you can imagine, many states were and are completely unprepared for this new program.

Built to accommodate W2 workers, the revamp to state systems to also include the self-employed is a bit sluggish, with some states not yet ready to accept applications.

The COVID-19 Series of postcards are available in the postcard section.

“States appear to be awaiting guidelines from the Labor Department, and some are updating their administrative processes,” according to Greg Iacurci at CNBC.com.

He goes on to detail the experience of one self-employed Rochester, New York woman who was unable to apply via the website. Apparently, the site demanded a copy of her W2. She phoned the office (it took numerous tries before she got through) and was able to apply by phone and faxed her IRS Schedule C in lieu of the required W2.

How much can you expect to receive in PUA? Iacurci says that the self-employed may “… receive half their state’s average weekly unemployment benefit plus $600 a week.”

A far cry from the average commission check, but it will put food on the table.

Check your state’s unemployment office website for details specific to you. For instance, New York has a handy chart detailing the requirements for PUA in that state.

Get a small business loan

I feel for the higher-earning real estate agents right now. To go from a huge income to nothing has got to be something they never expected.

For these agents, especially those with employees, a small business loan may be the answer.

The Paycheck Protection Program, part of the CARES Act, has $350 billion to offer small businesses.

“The program is designed to get cash into the hands of suffering small businesses quickly, with less red tape and fewer guardrails than the SBA’s existing loan programs,” according to Aaron Gregg at WashingtonPost.com.

The main goal of the program is to help employees remain on the payroll by incentivizing small business owners. The bonus for you is that you may qualify for loan forgiveness.

Get details on the Paycheck Protection Program and learn if you qualify at SBA.gov.

Should you consider raiding your retirement funds?

Because there are very pertinent pros and cons to this question, the answer is a toughie.

Some of the disbursement rules have changed, making it even more tempting to raid your retirement accounts. In the past, there were penalties for early disbursements from these accounts.

Today, account holders are allowed to take, penalty-free, up to $100,000 as a “hardship distribution” from their IRA, 401(k) or 403(b).

You will pay taxes on the disbursement but the CARES Act allows you to spread the payment of these taxes (and the repayment of the disbursement) over three years.

“The biggest consequence of withdrawing money from your retirement plan is that you are losing out on that money compounding,” Mitch Goldberg, financial advisor tells Sharon Epperson at CNBC.com.

If this feels like a good solution for you, run it by your financial planner first. He or she may offer up insights you haven’t considered.

Stay healthy!

Send the Virtual Consultation postcard from the COVID-19 Series to an area where you want more listings.

Need help targeting a specific niche of buyers or sellers? Use our mailing list tool to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!

PLUS: When you have time…here are some Free resources we’ve made available to support your success.

1. The 12 Month Done-For-You Strategic Marketing Plan

The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do when. Four key market segments are included, Niche Marketing, Get More Listings, Geographic Farming, and Sphere of Influence. –Click Here

2. The Free One-Page Real Estate Business Plan

Treat your business like a business it is vital to long-term success in this industry. Some agents may put together elaborate business plans, yet there’s something powerful about keeping it simple. Check out our one page Online Real Estate Business Plan. – Click Here

3. Become a Listing Legend Free eBook

Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here

4. The Free Online ROI Calculator

Consistency and automation are the keys to success. Discover how effective direct mail marketing can dramatically increase your bottom line. Enter your statistics in our Free online ROI Calculator and click the ‘CALCULATE MY ROI’ button to see your results instantly! –Click Here

5. The Real Estate Marketing Guide “CRUSH IT”

The “Crush It” Guide includes easy steps to launching an effective direct mail marketing campaign, how to create a targeted mailing list, the perfect way to layout marketing materials for success, seven opportunities available to target in your area right now. –Click Here

5 Budgeting Tips for Agents

Business Success

Jul 25, 2018

Get ahead of the inevitable rate hike

Fannie Mae’s economists dusted off their crystal balls, peered into the housing market’s near future and came away upbeat.

In the overall economy, they predict strong growth and low unemployment rates to continue. So, bring on the rate hikes, right?

They predicted four rate increases in 2018 (up from the three they predicted in March) and then another three in 2019. Hopefully, this won’t impact too many of your buying clients.

Their housing market-specific news includes a continued tumble in the conventional mortgage application rate. Which is why, in a business so dependent on a healthy economy, it’s important to be strategically budgeting both your personal and business money.

I did a deep dive into the experts’ opinions on what it takes for an independent contractor to financially succeed during the tough times. Here are several of their basic tips.

Start with your personal budgeting

Taking care of your personal finances is job one. Once that’s done, you’ll have a clearer picture of how much money you need to make and how much of it you can devote to your business expenses.

When budgeting, you need to be flexible enough to accommodate your income swings and to allow for an emergency fund. Most financial pros suggest you’ll need enough to cover both your living and business expenses for six months.

Once complete, that budget may be a real eye-opener. Look for ways to cut needless spending and redirect that money elsewhere.

Forbes.com’s Laura Shin suggests taking a critical look at your recurring spending. “Are you really using all the offerings of your mobile phone plan …? Do you go to the gym often enough to justify the monthly cost? What if you took up running, played tennis with a friend or used exercise DVDs instead?”

She also mentions that you consider cutting the cord. Cable TV has become ridiculously expensive when there are other, less expensive options (streaming) out there.

Your business budget

If you don’t already have a business account, open one now. Your tax preparer will worship the ground you walk on.

And, if you do your own taxes, you’ll be immensely grateful every quarter that you don’t have to pick through your expenses to separate the business from the personal.

Your real estate business budget needs to include more than your listing expenses, gas, and auto maintenance costs. Among the other categories, ensure your budget includes money for: taxes, health insurance, disability insurance, website expenses, salaries, marketing your business, closing gifts, wardrobe, and professional fees.

Once you’ve created the budget, it needs to be maintained. Track your expenses and income and tweak the budget, as needed.

Consider the bucket system

If you’re like a lot of us, you haven’t a clue where you spend your money and how much is wasted. Budgeting is a pipe-dream that you know will never meet reality.

So, make budgeting a game, of sorts. Divide your expenses into three “buckets.”

1: The first bucket holds all your ongoing expenses, such as utilities, house and car payment and other debt payments.

2: The next bucket is for expenses such as food (both dining out and groceries), entertainment and clothing.

3: The third bucket is for the money you’ll spend in the future for things like healthcare deductibles, retirement accounts, home repairs and maintenance and vacations.

Do the same with your business expenses.

Your business expense bucket

Start the system with bucket number three, decide how much of each commission check you’ll need to set aside for future expenses. Experts suggest that you open a separate account for your third bucket. The first payment you make from each commission check should go to this account. The rest of the check goes toward monthly personal expenses (bucket number one).

The amount left over after taking care of recurring expenses is what you can dump into bucket number two.

To remain on track, monitor your spending for two or three months to determine how much you’re spending from the second bucket. Take the average, multiply it by 12 and divide by 52. This will give you the amount of money you can spend, weekly, from the second bucket. Divide it again by seven to get your daily limit.

Remember to be mindful of your spending, especially for business items. “Expenses should create income. If an expense doesn’t create income, it should be eliminated,” Tom Wheelwright, CPA told Inman.com’s Dani Vanderboegh.

Question every purchase. If you don’t need to make it, don’t.

A smart way to utilize your marketing budget? Attract buyers with a proven method of marketing.

Send the Don’t Wait postcard from the Fence-Sitter Series to at least 100 prospects in an area where you want more buyers.

Need help targeting the perfect niche of buyers or sellers? Use our mailing list tool to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!

PLUS: When you have time…here are 3 free ways we can help you CRUSH IT in 2018!

1. The 12 Month Done-For-You Strategic Marketing Plan.

The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do when. Four key market segments are included, Niche Marketing, Listing Inventory, Geographic Farming, and Sphere of Influence – Click Here – Click Here

2. The Free 2018 Real Estate Business Plan.

3. The Free Online ROI Calculator.

Also…check out these cool tools

Three Click Postcards – Just snap a home photo & create a postcard all from your mobile phone

MLSmailings.com – Automated Just Listed, Just Sold Postcards

Market Dominator System – Become a neighborhood brand

Want to Refer a friend or colleague? Refer them, Here. THEY get a Free $25 Gift Card and YOU become their hero!