Build Your Street Team with 3 Different Payment Structures
- Marketing and Press
If you’ve been stuck in an exhausting cycle of buying the same property lists everyone else has, and marketing to them along with a number of other investors who are doing the same thing - then it’s time for a change.
For REI Operators who are looking to add a predicatible lead source with an ROI double that of buying lists, hiring a street team is pivotal.
You know a street team can work if implemented right, but you’re worried about managing your drivers, paying them and the extra work it will become for you. You’ve seen others find success with it and want to give it a try because you're tired of buying the same lists everyone else has.
DealMachine was made to help you “scale the unscalable,” recruit, train and hire a street team to create a unique lead list for your business. But before we get too ahead of ourselves, let’s start with HOW to build your street team and how to pay them.
There are a few different ways to build and scale your street team, and different payment structures that work best for each. Before you begin hiring your team, choose the structure that will work best for your business.
1. Paying Drivers Per Closed Deal
If you’re working with a marketing budget of less than $4000 per month, but you have time to mentor your drivers, paying a $500 fee or up to a 20% wholesaler fee per closed deal may be the best choice for you. Your drivers will receive mentorship from an experienced investor and you’re getting leads. Plus, if a property they sent through to you ends in a deal, they get paid.
The pro of this payment structure is that there’s no cash required up front. This is why it is best for those that don’t have a huge marketing budget.
The cons of this payment structure are that drivers can flake out. Your drivers need money to pay bills and living expenses. Not everyone can wait around until one of their leads turns into a deal. One other con of this payment structure is that it can be very expensive long-term. Paying hourly or per deal will be less inexpensive than paying a percentage of each closed deal.
With the pros and cons in mind, let me introduce you to two teams that have found success using this payment structure. The first is TJ Ruizo. He takes the time to mentor his drivers on deals they’ve submitted that turn into appointments. His drivers stay motivated through his encouragement and enjoy learning along the way. They are also taught to take responsibility for their deals and see them through to the end. We have interviewed TJ numerous times because of the way he coaches his driver team. Learn how TJ keeps his drivers motivated and excited to drive for him.
The other team that has found success using this payment structure is the Polites. The Polites earned $500K in their first 6 months using DealMachine and built out their multi-location street team. Because their street team members are in multiple markets, they aren’t able to mentor them in person, but they keep in contact with them through their social media community.
2. Paying Drivers Per Qualified Lead
If you don’t have time to mentor, but your marketing budget is still under $4000 per month, then paying per qualified lead added may work well for your business. Paying drivers .60 cents per qualified lead, all the way up to $2 per qualified lead may be the best option for your business.
The pros of the per qualified lead payment structure are - it’s less expensive than paying per closed deal and it’s easy to see what you’re paying for.
There are a few cons to this structure as well. First, it’s more difficult to find consistent drivers and second, their pay is not tied to you closing a deal so you will have to pay your drivers up front.
One stand-out team that has used this payment structure to explode their business is JZ Homebuyers in Dallas, Texas. Justin Peters and his team closed 45 deals in Dallas last year using DealMachine. Their street team played a huge role in that accomplishment.
3. Paying Drivers Hourly
If you’re working with a marketing budget of $4000 or more per month, then there is a third payment structure for you to explore.
Committing to paying someone $12-$15 per hour for 15-40 hours per week will help you create a reliable driving team. With this payment structure, it’s important to set KPI’s (key performance indicators) so that they know how many leads they should add each hour they work. We recommend 15-20 per hour. Explore more real estate metrics to consider.
There are a few other pros to using the per hour payment structure, such as needing less drivers. If you are able to pay consistently, your drivers will drive consistently. This also means you won’t need to spend as much time managing them since you only have a few drivers. And finally, paying per hour can be the cheapest option to get deals long-term.
There are plenty of pros to this payment structure, but let's look at the con, too. The biggest one being the cash you need to commit to paying a driver regularly - which is why we don’t recommend this option if your marketing budget is less than $4000 per month.
Within DealMachine, there are many teams who pay their drivers per hour. Boothe Home Buyers out of Layton, Utah has implemented this payment structure. Ran by Zack Boothe, they made $1 million in wholesaling fees with 1 full-time driver in 2019.
Take Action and Hire Your Driving Team
If you’re looking for a simple way to recruit, hire and train your drivers, the DealMachine Recruitment and Training Portal will help train them on everything they need to know about driving for you and how they will get paid. You don’t have to worry about explaining this to your drivers every time you hire someone new.
No matter what payment structure works best for your business, put it in place, add it to your driver contract and begin recruiting drivers to your team. This won’t work unless you get started.
If you want to know more, watch the webinar with Josh Johnson to learn Enterprise tips and tricks for managing your team of drivers!