If you are an experienced REO broker then you probably have experienced the burning hole in your pocket from "loose" billing at one time or another-it's a hard learned lesson that you fix swiftly. If you are a new REO broker then LISTEN UP. I am about to share with you the DEADLIEST PITFALL that kills the profits of many aspiring REO brokers (and even some already successful ones). You MUST seek out and find the very best book keeper in town...even if you have to steal 'em from a competitor or another business. Hey, real estate is vicious-play hard or get beaten down-it's that simple. That being said, carrying costs can be ENORMOUS when handling hundreds (or thousands) of files at once. In my business it is not uncommon for me to be floating costs in the six-figure range (Don't let this scare you. It's a self-replenishing account that feeds itself. I'll teach you how it's done with little personal outlay as an REO Rockstars "Inner Circle" member). You will eventually have more bills coming in than you possibly keep up with as the person in charge of "running" the business. Arguably, I'd say this is the VERY FIRST person that I'd hire in my business had I to do it all over again. Why? Because being late or accidentally "skipping" the submission of your expenses for reimbursement can mean that you wind up literally "working for nothing". While this may seem unimaginable, I know MANY brokers, who have sold hundreds of properties each year, go totally bankrupt because they couldn't handle their billing. Take this scenario: You sell a $25K REO for a client who pays you a 2.5% commission (disclaimer: commissions are totally negotiable and all clients may pay different amounts), that adds up to a $625 commission at closing. Now let's just say that the client had pulled the home off the market to address safety issues and it took a total of 10 months to get this baby sold and closed. Assuming you had utility expenses of $50/month. That's $500 in expenses. SO somehow in the mix you got so caught up in the millions of other tasks you were juggling as your business went through huge growing pains and you never submitted your receipts. You wind up with a whopping $125 NET. Now subtract all the intangibles like office expenses, MLS fees, courier fees, etc. and you wind up with a big fat ZERO...or maybe even worse! You new brokers are probably saying "nah..won't happen to ME" but trust me-all the experienced brokers are saying "yep...sucked when I got burnt". I'll also note that you do NOT want to hire some high paid accountant who wants to preach to you all the latest tax rules and tax saving schemes you should be using. That is an entirely separate role. You want a BOOK KEEPER.-someone who is good with QuickBooks and can sit there and bust out tons of invoices every day (could run upwards of 150-200 each day in my business at times. Do you really WANT to handle that in your business..probably not). Take your time. Hire slow. This job is critical.
REO Bookkeeping: Why you MUST Hire the BEST!
