How To Earn $300 a Day Completing BPO’s
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Most people are familiar with how real estate agents get paid. Real estate agents earn a commission when they sell a house and escrow closes. But what if I was to tell you that that wasn’t the only way to generate income with a real estate license? Many brokers and agents have added property management to their repertoire as a way to generate regular consistent income in real estate, as opposed to relying on commissions that often fluctuate from month to month. Agents can earn a percentage of the rents that they collect every month.
There is yet another way to generate immediate, consistent income with your real estate license completing BPO’s, or broker’s price opinions, for banks, lenders, corporate institutions, insurance companies, and hedge funds. If you are a licensed agent, you have probably heard the term BPO and you’ve probably heard other agents or brokers dismiss them as not very profitable and time consuming. I understand why.
Let’s go over what a BPO is and why they exist.
A BPO is an estimate of a property’s worth completed by a real estate agent or broker. The forms are usually completed online, although I have submitted many BPOs using a word document as well. These estimates are often used to help corporate entities decide what they are going to do with the property or the loan associated with the property. I have also completed BPO for bankruptcy and divorce proceedings as well. They are not appraisals and are more in depth than a comparable market analysis. Depending on how good you are at finding comparables to the property, completing a broker price opinion can take up to 30 minutes per form.
BPOs cost a lot less than an appraisal and as mentioned, are nowhere near as detailed. They are a cost effective way to get a professional estimate of a property’s market value. As agents we are compensated anywhere from $25-$250 per BPO we complete depending on the distance and complexity of the report.
When I first learned about BPOs in 2005 I was shocked that I could get paid to complete what I did anyway which was comp out properties for clients. Think about it. How many comparable market reports do you complete for clients per month? How much do you get paid for that? I already know the answer to that. You get nothing, but the expectation that when a client buys or sells, they will use you. The same thing applies here. Your name and license number is associated with that report and there is the possibility that the owner of that property or loan could always use you if and when they decided to sell the property. The only difference is, here you would be compensated for finishing the report.
The average pay for a report is $40 per BPO. Most states require that all fees be paid directly to the broker and the broker to be responsible for compensating the agents. It is important that you review abide by the laws mandated by your state’s department of real estate.
Each BPO requires you to visit the subject property and take photos of the property and compare it to 3 sold properties and 3 active listings. You can use your camera phone, and the photos don’t have to be MLS quality photos. In other words, you don’t need your wide angle lens for these. It usually takes me about 5 minutes. Make sure the images are taken horizontally. Some clients need the photos time stamped. Most reports require the following photos:
– Address Verification (curb or door or mailbox)
– Front of home (2 Angles)
– Left Side (Exterior)
– Right Side (Exterior)
And a view of the street from left and right like this (think Google street view) :
Accepting orders that are too far from you become cost prohibitive as the cost of gas and the time to complete these exterior photos just wouldn’t make sense. When I first started doing BPOs I accepted anything that was within a 60 mi radius of me, which wasn’t smart. Back then we were using Blackberry’s (mobile phones for those under 30 years of age), and would sit by our phones waiting for mass emails to go out distributing BPO work. It wasn’t uncommon for a valuation company to start distributing orders on a first come first serve basis at 8:00 AM EST which meant I would wake up at 5:00 AM PST just to click on a email link to accept work. Those were crazy times and fortunately for you, you don’t have to do that anymore. These days there are companies that can auto-accept the orders for you for a small fee per report.
Remember the 3 sale comparables and 3 active listings required to complete the report? I was so naïve and gung ho that I would even visit the comparable properties and photograph them myself, which is not required and added an extra 90-120 minutes to every order I did. I thought this would impress the banks and valuation companies that I worked for, but it didn’t, and in the process I got burned out and lost a lot of money in the form of time and potential commissions that could have been earned.
I didn’t fail. I learned how to leverage.
I knew there had to be a system that would allow me to complete more BPO orders and so I hired people to help me with the data entry. Eventually I graduated to hiring what I called a field representative who would visit properties for me. Everyone was local and everyone worked out of my broker’s real estate office. In retrospect, he was kind enough to let me do this, as back then, BPO checks were sent directly to the agents and he did not benefit financially. What I had done was created a system whereby
- I would accept the BPO orders
- I would assign the orders to my data entry team
- I would send my field rep to visit the property and complete the exterior photos and inspection.
Using this system I was able to scale. By 2007-2008, during the market crash, we were completing between 300-500 BPOs per month. That’s was over $12,000 gross revenue.
Times have changed and in our post-COVID world people have gotten used to working virtually. There are many data entry companies that offer virtual assistants both in and outside the US to assist with data entry. There are also several field representative companies that can inspect and visit properties for you. All of these advances have allowed me and many other BPO agents the ability to scale even further. This doesn’t mean that I never visit a property and complete inspections. It just allows me to be in more than one place at a time.
The more reliable you become, the more valuable you become and the higher the fee earned. There are many BPO agents earning $65.00 per exterior report in comparison to the $40.00 average fee, and it isn’t unheard of for some BPO agents to earn up to $250.00 per report, especially in more rural areas. I’d estimate that the average net per BPO, when you employ the efforts of other people, runs you about $25.00 per BPO.
Additionally, it will be your job to register with as many BPO providers as possible and win them over. Being a BPO asset manager can be very stressful and real estate agents drop the ball on reports all the time. I’m sure that sometimes it’s because the agent is a one-person show who doesn’t see the value in driving 30 minutes to inspect a property only to then work on the report for an additional 30 min for $40.00. This is usually when a BPO agent with a team steps in and seizes the opportunity to impress.
In the video below I am sharing actual emails that I get from one of my favorite Broker Price Opinion (BPO) companies, aka valuation company, and these emails are for BPO orders that normally pay about $45 per order. Some are more and some are less. It isn’t uncommon for me to get requests of 10-15 orders per day and when there are big BPO bulk drops even more.
As I go through the emails you will see that these BPO’s are requested throughout the day during different times. Occasionally I do get emails from some providers and they let me pick and choose from small batches of orders. Other providers email me individual orders confirming that I can complete them and at what cost.
The key here is accountability and organization. There isn’t anything unbelievably amazing or unique about this process. It isn’t brain surgery. The key here is building a reputation as the go to person in your city, county, and state.
Trust me it’s stressful for asset managers to assign orders to agents who don’t perform well and there’s nothing they like more than have someone in their back pocket that they can give all their orders to.
I’ll show you step by step how to do it, give you the exact business mode I use including templates and strategies, along with a list of all the BPO providers that are looking for agents to complete these reports for them.
Learn how to build your own BPO business here:
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