No Way Out

Submitted by Mike Terry of Connect Realty Charlotte, NC

I just finished reading a blog on Active Rain titled “Realtor Retirement – Is There Such a Thing as Planning your Real Estate Business Exit?” After reading the comments posted by other brokers, I didn’t know whether to laugh or cry. It made me feel like Kevin Costner in the movie “No Way Out”: once you get into real estate, you are forced to work and can’t retire because you have no way out.

Some agents boasted they would sell their business as a retirement. 

Even though agents are all paid as independent contractors, real estate is just a job to many agents and not a business. They trade time for money. You cannot “sell” a job. 

Some agents commented that it was a great idea to really start thinking about retirement. Are you kidding me? Have you told your spouse? Do you want to work until your last day on earth? 

To retire you will need a plan.  Do you have one? 

Careers in many companies and industries include a qualified plan or pension for retirement. Real estate doesn’t have that. There is no pension. You can create an IRA, a 401K, or some other plan, but YOU have to have the foresight to contribute to it. Most agents do not have a plan; if they do, their contributions are way down. And the sad but true fact is that for the few that did have a plan, much of its value was lost when the stock market tanked in 2009. 

In 2007, only 36% of agents had a retirement plan. Looking deeper at this 36%, many in this group were doing real estate post-retirement and their retirement was with their former career. With the new economic climate, I dare say, these percentages will be much lower.

Have you seen this TV commercial where the parents are talking back and forth about the possibility of having to move in with their kids?

Can’t you just picture the one where one of the spouses is a real estate broker that says, “Honey, stop hassling me about planning for retirement. Don’t worry, I’m ‘Hauling and Hoping’.” I want to see that fight.

What is your plan? Is it written down? Is it executable? What are your choices?

Let me give you a clue: if buying Power Ball tickets every Wednesday and Saturday morning is your plan, you are in trouble.

What are your options? I absolutely love some of the answers agents give. They are so detailed. Parents out there, did you ever notice that when your child was making up a ‘big fib’ they were very, very detailed? Sounds fishy…

Here are some points from someone who takes planning for retirement very seriously and has had the experience necessary to see what works and what doesn’t:

• If your plan is to live off your investments, rental property, and nest egg: Investment counselors now recommend at least a $2 million minimum rather than the former $1 million.
• If your plan is to sell your business: How much is it worth? Who will buy it? How will they buy it? How long will those proceeds last for you?
• You can lower your standard of living.
• You can become night greeter at the local ‘box store’ if you don’t plan.
• You can leave real estate and start selling a new product, but if you haven’t created a retirement plan, you now have the same issues with a new industry.

I was no different from many brokers in terms of my retirement planning. I had a 401K, but the tough economic times took care of that. But I was lucky; I found a real estate company that has a recurring revenue component that will allow me to retire or, at least, not change my standard of living.

A revenue share program is at the heart of Connect Realty’s agent compensation plan. Connect firmly believes that any licensed real estate agent who recruits other agents to join the company should receive a bonus in return for their recruiting efforts. Connect also pays a revenue share for the next level of recruited agents. This just might be your answer to “No Way Out.” I knew I had found my answer when I joined Connect Realty.

Do you want to ‘show till you die’?  That could have been my fate if it weren’t for Connect Realty. I have a written, executable plane where I do have an exit from real estate just like my friends and family who work in other industries.

Mike Terry is a broker with Connect Realty in Charlotte, NC. Contact Mike:
Office phone: (704)361-7027
Cell phone: (704)361-7027
Email: MikeTerry@ConnectRealty.com
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