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RLTY Capital, a finance firm for real estate professionals, has launched a new suite of agent tools and resources dubbed “Success Services” to help real estate agents achieve financial health and adopt sound business practices as independent contractors.
RLTY Capital co-founder and CEO Briggs Elwell told Inman that adding these services to help agents become more educated on building their business in a more savvy way was always part of the business plan. But as the market began to shift in recent months, the company realized it was more important now than ever to get a jump on those plans.
The still-green firm launched in 2021 with its signature service of advancing agents their commissions by purchasing those commissions and providing agents with the funds in about 24 hours, rather than making them wait through a sometimes year-long pending transaction period to get paid.
“When we came up with the idea of RLTY Capital, it wasn’t just founded upon the concept of commission advancing,” Elwell said. “For us, that was kind of the first glaring gap in the space where agents have this time frame of necessity to get their commission sooner. So that was just the entry point for us. And as you know, for better or worse, due to what we’re seeing in the marketplace right now, we realized that we needed to jump in and start to accelerate some of the other programs that we intended to offer.”
Now, agents who sign onto RLTY Capital’s commission advance service will also have the option to access legal structuring and advisory services, a network of industry thought leaders, accountants, wealth managers and a variety of real estate courses — including some in Ryan Serhant’s “Sell It Like Serhant” course package.
Having started his career in luxury residential real estate at Related Companies and then running several brokerages in New York, Elwell said he knows just how in the dark some agents are about some of the best practices for running their own business.
“It would surprise you … it’s remarkable, but at tax season, the number of agents — even top producing agents — that are still potentially getting paid directly as a 1099 and not taking advantage of the ability to get an LLC set up and potentially not have to pay things like self-employment taxes,” Elwell said. “And that is a gap in the education industry for real estate agents. Most brokerages are not there to assist their agents in wealth management and tax services or even legal, they’re usually there to help train the agents as to how to better market themselves.”
Serhant, CEO and founder of the brokerage SERHANT., is also a partner and equity holder of RLTY Capital through the investment division of his company, SERHANT. Ventures. He told Inman that he’s known Elwell and RLTY Capital’s co-founder and President Daniel Kennedy for years, having all moved around the same circles of New York City real estate. When Elwell started bouncing around with Serhant the idea to create a commission-advancing company, Serhant said he knew it was something he wanted to support.
“When [Elwell] was ideating the firm and was kind of talking to me about it, I said, ‘That’s actually a genius idea,’ ” Serhant told Inman. “And because we contract directly with the agents versus the brokerage company, it makes it far more comfortable for the salespeople to use these services and no one else does it that way. I said, ‘This is awesome. This is something that is sorely needed in the industry, and if we can help agents invest in themselves, I want to be a part of that, because I believe in salespeople.’ ”
In addition to RLTY Capital’s existing customers, individuals enrolled in Serhant’s “Sell It Like Serhant” courses will also gain access to the company’s new Success Services.
Pricing for RLTY Capital’s services varies based on the size of the commission or how much of a commission an agent wants to get paid, the risk level of the transaction, the time until closing and an agent’s individual transaction history, Elwell told Inman. One example offered on the company’s website is if an agent requests a commission of $5,275 on a deal set to close in 30 days, the agent’s cost would be about $275.
Also on its website, the company emphasizes that its services are not a loan but “commission funding” through its purchase of an agent’s commission. A 14-day grace period is automatically included with agreements made with RLTY Capital and agents in case a closing gets delayed. If a deal falls through, the agent can replace that transaction with another one of their pending or future transactions.
The company currently offers the commission funding, tax and legal services in New York, New Jersey, Connecticut and Florida. Its new tax and legal benefits will be available to all RLTY Capital’s partnered brokerages nationally starting in January. It also hopes to roll out the commission funding services nationwide by the end of 2023.
Elwell and Serhant also both noted that RLTY Capital’s services aren’t just helpful for agents who need their money quicker to pay essential bills but also for agents who want to invest in themselves. Serhant pointed to an agent he knew of who used the company’s services to get funds to hire an assistant.
“And he doubled his business in the next 12 months after that,” Serhant said.
Elwell said that another agent was able to use his advanced commission to purchase an investment property, which he otherwise wouldn’t have had the money in time to close on.
RLTY Capital has a number of other services for agents coming down the pike as well, Elwell said, including healthcare and life insurance, both of which should be available by the first half of 2023.
“[The Success Services are] truly filling a necessity, going through a very slow time [in the market],” Elwell said. “And hopefully agents can take advantage of this time to get their business set up correctly so that when they get back into a high volume work, they don’t have to worry about things like their accounting.”