Franchise promises brokerage benefits without the hassle By Tony Palermo

Realty Point is a new franchise model that promises high-income real estate brokers the benefits of running their own brokerage without the administrative hassles or hefty monthly expenses.

“There are significant advan- tages for high-income real estate agents to operate as a corporation,” says Realty Point president and founder James Hussaini. “But run- ning your own brokerage is a huge hassle. It involves a lot of paper- work, rules to keep up on top of and carries substantial administra- tive and operational costs.”

He says his company’s system “takes care of the pain of running a brokerage while still providing the advantages and lets Realtors focus on selling and making money.” Hussaini says one of the main advantages for operating as a corporation is the significant tax savings it can provide. As a sole pro- prietor, all business income is taxed at a personal tax rate and the more you make, the more tax you pay. High-income earners can pay over 40 per cent of what they earn to the federal and provincial govern- ments. But corporations pay a fixed tax rate of just 15.5 per cent on the first $500,000 of profit. This allows for significant tax deferral and lets salespeople pay the higher person- al tax amount only on the money they draw from the business for their own personal use.

“That’s another huge advantage to this tax deferral strategy,” says Hussaini. “It’s better suited for varying income cycles. By running your own brokerage as a corpora- tion, you can keep your money in the corporation until you need it, saving you from paying more tax than you need to.”

Operating a brokerage also car- ries a huge overhead, says Hussaini. There’s the cost of the building, the utilities and insurance on the building and substantial adminis- trative and operational costs in terms of employees, software and equipment.

Hussaini also says that being a great salesperson doesn’t neces- sarily mean you’re a good busi- ness owner, operations manager or administrative person – all skills required to operate a successful brokerage.

Here’s how Realty Point works:
Brokers buy a franchise for an ini- tial cost of $5,000 for a five-year term and pay a flat monthly fee of $500. Each transaction (actual closes) also costs $500.
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In return, the broker receives a fully furnished and equipped pri- vate office, use of a state-of-the-art boardroom, access to the latest back-office technology and remote storage using cloud-based technol- ogy and full administrative services including reception, appointment making, transaction co-ordination and support, monthly reconcilia- tions and new recruit coordination.

The brokerage currently operates out of three physical locations in Toronto, Markham and Oshawa. Hussaini plans to add other locations.

He says another advantage to Realty Pointy is brokers build their own brand, not someone else’s. When it comes to naming the franchise, the only requirement is that “Point” is added to the end of it.

In other words, if your broker- age is called ABC Realty, your new franchise name will be ABC Realty Point. Your brand name always comes first, and not the other way around.

“These are not mini-brokerages that operate under another ban- ner,” says Hussaini. “Your broker- age is totally independent. And, Realty Point is a lot cheaper than the other systems out there.”

While the company provides the turn-key brokerage solution, salespeople still need to get their broker of record licence and are ultimately responsible for signing off on all transactions.
 
Hussaini says he started in the real estate industry in 2003 and in his first year was named Rookie of the Year in his firm. By 2006, he was operating his own brokerage and that’s when the reality of what he was paying for rent, and administration and operations costs, hit him.

The tipping point was when his best-performing agent surprised him one day and said she was opening her own brokerage. When he asked why, she said it was because her accountant told her she needed to incorporate to save money and to run her business more efficiently.

Realty Point is holding a for- mal launch information session on Wed. Dec. 10 between 4:30 pm and 6:30 pm at 240 Duncan Mill Rd, Suite 600, in Toronto. To reg- ister or receive more information, visit www.realtypoint.ca/launch or phone: 1-800-410-8516. REM

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