I’m not naive enough to ignore the fact that business empires are built on networking and reputation. Instead of offering a “thank you” to people who bring business my way, I pay out. It can be something so simple. Something as simple as you seeing an investor on social media asking for DSCR financing and you tag me in the post. I’ll then save that persons email under your name in my CRM, and every deal I close with them, I’ll pay you a referral fee, and that’s for life.
The payout amount depends on the deal size. On average, the referral fee is anywhere from $300 to $500, but have been as high as $1,800 (this was a $1.1M portfolio loan). To simplify, I payout 10% of whatever I make on the deal. I’d love to payout more, but I have a full time assistant who I pay a very nice salary to, plus marketing expenses, and taxes. Don’t even get me started on taxes. So it’s not like you get a measly 10% and I pocket the 90%. I’ll probably take home a profit of 60-70% on each check myself.
It’s also a simply way to bring in passive income. I have a few investors who refer 2-3 deals per month to me and bring in around $1,200 – $1,500 in referral payouts, all just from connecting us.
The cool thing about this, is it doesn’t violate RESPA guidelines, as DSCR loans are not under RESPA regulations. Even other real estate professionals such as appraisers and realtors can receive a referral payout from me. RESPA states real estate professionals can receive a referral fee if it’s a mortgage for an investment property, which is what DSCR loans are.
There’s a few ways to refer someone to me:
- By utilizing the referral tab on my website
- Tagging me in a social media post you see regarding someone seeking financing
- Emailing/texting me someones email