Profit First: How to Make Sure You’re Profitable in Real Estate

Profit first. Today on ICC TV, we’re going to talk about
profit. It’s one of those subjects that we don’t talk
a whole lot about real estate, but yet it’s the most important thing. Hi, my name is Brad Baldwin with Icenhower
coaching consulting, and one of my passions when working with rural state teams all across
the country and Canada is getting them to be at a level that’s much, much, much more
profitable than they are right now. Why the heck do we get up every day? Well, usually it’s to make money, but as what? After what we do with that money, this makes
a difference. When I asked you a question, what is your
budget model look like on your real estate teams? A lot of people don’t know how to answer that. They think, well, if there’s money in the
bank, I’m good. If my spouse is happy, we’re good. You know, if I have money, we’re good and
my credit card swipes and doesn’t get declined, I’m making money. Well, that’s not running a business by design
that’s hurting a business by default. Okay. And by running anything by default, it’s a,
it’s a model and it’s a system that’s not sustainable over time. If you like what you see, go ahead and hit
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free content. We got your week. If there’s a particular topic that he want
us to talk about this comment below on this channel and we’ll make sure that we make a
video of it. So why don’t we look for in a real estate
profit loss statement? Well we have several categories. I’m just going to hit on a few of the main
ones. The first one is gross prod. What are we bringing in? That’s our gross commission income. Okay. A lot of people will say GC, I, okay, that’s
the check that we get before any kind of brokered split Eno on insurance. Um, HOA fee maybe had to buy a bar fridge
because you didn’t really write it right. And the real estate contract, that sort of
thing is gross commission income. Okay. And after gross commission income, we have
what we call the cost of sale. All right. What’s a cost of sale? Let’s say that I have a real estate agent
on my team, Bobby Lee, big Nick and bottom is a big, big is my buyer’s agent and she
goes out and sell the home. Good for her. I’m glad she sold a home. I have to give her a certain percentage of
that gross commission income for Ashley going out and selling that home for the real estate
team. That’s a possible sale. How I’ve never had that sale about lobbying
for big, big and therefore that is a cost of sale comes out of the gross commission
income. Maybe you have a split with your brokerage
or right that split with your brokerage. You can’t cash that check until you came to
that split with your brokerage. That’s a cost of sale and we want to track
the costs of sales because it tells us a lot about where we have room and our commission
splits with our buyers agents is not exactly right where it needs to be or maybe we’re
not making enough gross commission income to make it all balance out. That’s a cost of sale, very important to track. Then we have the old expenses. And when we think about a profit loss, that’s
what we call expenses. That could be salaries, it could be what you
spend in lead generation. It could be just what you spend and computers,
it could office supplies and the gas for your car. That’s expensive. And any expenses have to run in line with
the budget as well. So when we think about gross commission income,
cost of sale expenses, whatever’s left over, that’s what you get to feed your family. We want to make sure that that number is,
is largely possibly can make it. And if you need some more help with this,
click the link below, let’s say and you’ll be connected with one of us and
we’ll have a conversation. I’ll want to rule estate coach and consultant
can do for you to make sure that an end of the day you’re making as much money as possible
and more importantly, keeping it until the next week.

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