Junk Removal Service Owner Earns $22,000 A Year From Real Estate Referrals

This transcript was generated from the episode audio and may contain minor errors.

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Side hustle school listeners, welcome back. My name is Chris Guillebeau. Question for you today. Would you hand out business cards for an extra $22,000 a year? That's exactly what the person you'll hear about in today's story does.

It's not network marketing, it's not anything weird. It's just about a guy who's found a way to create an additional income source by providing specific referrals to people he runs into in the course of his other business. This is kind of a different sort of affiliate business that actually relates to real estate, even though he himself is not buying or selling homes. And I think the story is a good example of how to find opportunities. A lot of what I try to teach you in the show is the power of observation and how there's probably something in your life you can do to make more money.

So I'll tell you exactly how this guy does it in just a moment. [Music]

Today's story comes from Kyle Clifford in Arlington, Virginia. By day, Kyle runs a junk removal service, and his side hustle consists of referring customers to real estate agents. Now many of Kyle's junk removal customers just so happen to be getting ready to sell their homes, but they haven't yet chosen an agent. They're just kind of beginning the process, and they think, well, before I invite agents to come and see my home, I should make sure that it's tidy.

Any stuff I don't need or that I've been accumulating for years, maybe decades, is gone, so I'll call this junk removal service first. And Kyle realized there was a logical connection between removing all your junk and going to that next stage of actually listing your home for sale. Now in Virginia, you have to be a licensed real estate agent in order to get a referral fee. So Kyle thought, well, how hard can it be? I'm not trying to create a career as a real estate agent, but I could get my license.

So he found a course he could take in an exam that converted him into a licensed real estate agent so that he could officially receive those referral fees. He then had an active agent sponsor him and signed on with the brokerage, then he was ready to go. And the actual side hustle part of it is pretty simple. Kyle's first question to homeowners is whether they're cleaning up or moving. And his first statement to renters is, if you can afford to rent in this area, you can probably afford to buy, and you might want to consider purchasing.

He then talks about his agent referral or just the virtues of purchasing a home while he's working with clients. It's a very soft pitch. He gives them his card, even if they have no plans to buy or sell, and he tells them to hold onto it. He then sends the customer's information to the agent to show that he referred that client. Kyle receives a referral fee for every referral that results in a closed transaction.

He refers about 10 clients a year, which results in roughly five transactions or referral fees. Now, if you know anything about the real estate business, you know that these are not small commissions. Kyle's costs for that real estate course and license were about $750, and he earns more than $20,000 a year from these referrals. Referrals are based on a percentage of sales, and he earns anywhere from $1,000 to $5,000 for each one. After his first referral fee, Kyle used the money for a two-week trip to Italy, which he thought was pretty good for just handing out business cards in the course of his other work.

Now, of course, it is the success of his junk removal service that has helped to pave the way for this side hustle. So he realizes, and I realize, that not everyone can go out and do this exact same thing. I like this story, however, because it's all about spotting an opportunity, realizing that if you're meeting a need for someone, there's probably some other need you could meet as well. And in fact, that is one of the core principles of a successful side hustle. Once it's working even a little bit, it's not usually that difficult to push it forward and make more money.

Kyle is next thinking about working to recruit new agents. So the brokerage that he signed up with has a profit-sharing business model where agents receive another small percentage of profits for any agents that they refer. So now he's thinking he'll have the income from his junk removal service, which is his main income, his side hustle income of more than $20,000 a year making these referrals, and perhaps, if it works out, ongoing residual income from any new agents that he refers. [Music]

So again, would you hand out business cards for $22,000 a year on the side? Most of us probably would.

And not everyone can do exactly this, but I would encourage you today to look at your day job, any existing side hustles you have, anything entrepreneurial you've done in the past, and ask yourself if there might be some connection to something like what Kyle has found, where without doing a ton of extra work, he has been able to create a lot of extra security. Now on a practical note, we always ask people about what challenges they face. Kyle says the biggest challenge for him is that when he receives these referral fees, taxes are not withheld, so he has to remember to budget accordingly. Now let this be a reminder to you, when you're making extra money, like through a referral fee or an affiliate commission, or through selling a product or providing a service, as long as you're above a certain income level, you will eventually need to pay taxes on that. So as a general rule of thumb, it's good to set aside something like 25% of whatever that income is, so that when the time comes, you'll have that money on hand, and it won't be a burden to you to meet that tax payment.

It's also always good as well to make sure you have a separate bank account for your side hustle funds, both income and expenses, and your personal funds. That is not difficult to set up. Any bank should be able to do it. A lot of credit unions can do it as well, and you can often do it online if you don't want to go in somewhere. Well, as always, I hope you enjoyed this episode.

Inspiration is good, but inspiration, combined with action, is so much better. Today's show notes are gonna be at sidehustleschool.com/182. Got another story coming up for you tomorrow, and probably every day after that. Have a wonderful day wherever you are. I'm Chris Guillebeau for Side Hustle School.

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