Traditionally, there has always been a middleman in real estate, the agent who helps investors buy or sell properties but who keeps a commission for his or her efforts: up to 10% in commercial and up to 7% in real estate in a two-way transaction (selling and buying). However, is it possible for a person to still invest in the property but bypass the agent so that they can save on that commission?
The answer is yes. Through Formulaic Inc. in Scottsdale, Arizona, Sonia Hodgin is giving her clients the formulas to be their own agents, and that knowledge is giving them significant payoffs. “I believe in thinking outside of the box,” she says. “That middleman has been accepted for too long. They are normally misunderstood as being an expert when in reality, all they are is a salesperson. I mentor people so that they know how to trade properties on their own. The best part, aside from the profit they make, of course, is the fun they have.”
Formulaic Inc. is thriving because it focuses on four services. The first is mentorship. “Sometimes my clients are a little intimidated at the thought of doing what an agent customarily does. I overcome this by going through their portfolios with them and helping them change their formulas,” Sonia Hodgin explains.
“They are able to see that they really can manage their own portfolios. As I tell them, there is no such thing as bad real estate, just a bad investor. They are excited to see that becoming a good investor is actually easier than they originally thought. There are over 300 formulas to use that can help them up their basis.”
Formulaic Inc. also offers Formulaic 300, popular 3-day seminars in Scottsdale, Arizona, that teach people how to learn about investments, do their first transactions, and trade in a forum. “I also show attendees how to take a bad debt and change it into a passive asset to cash flow,” Sonia Hodgin states. “People finish the seminar confident that they have the knowledge and ability to enter the real estate market. They also understand that they don’t need money to buy real estate – they just need to know the right formulas to use.”
Perhaps the most interesting service at Formulaic Inc. is Formulaic Circle, the company’s “Wine and Dine Trading Circle,” an invitation-only event in Scottsdale, Arizona. Once a month, twelve accredited investors from around the world meet to learn how to truly do a 1031 exchange. “No real estate agents are allowed, only accredited investors,” Sonia Hodgin says.
“The investor/attendee may have a $1 million property; by selling the property on their own with the 1031 exchange formula, they can defer an average of 38% taxation. On top of that, they save on the commission, which can be up to 10% in commercial and up to 14% in real estate in a two-way transaction. That $170,000 remains with the investor.” On any given night, she states that there are on average $38,000,000 in transactions. There is no fee for the attendee, as she is there as an investor. “I do not mentor anyone at these events. My attendees show up knowing what to do. They have to be savvy.”
Sonia Hodgin also started an online trading forum, www.formulaicinc300.com. The forum was created in San Francisco by a well-known software guru, Ed Wong. It is for paid members only; the cost is $10,000/year for unlimited listings and trade. She explains that they get to trade as many investments as they want with like-minded, accredited investors. “Once again, there are no real estate agents, brokers, third party involvement, or transaction fees. With one transaction, members have a return of investment instantly and beyond.”
Sonia Hodgin clearly loves what she does at Formulaic Inc., and she has sixteen other companies as well as investments throughout the United States. “I do love being an entrepreneur, of course,” she says, “but I believe in using my success to help other people. For every transaction we do, we donate. I have been a part of the Catholic Diocese in Tucson, Arizona, as a volunteer since I was fourteen, and I have volunteered with Boy Scouts of America in Tucson for nine years.” She has the highest ranking of training of Wood Badge, served on BSA’s board of directors, and put together its Friends of Scouting events in Tucson, also.
Through Lutheran Services in Tucson, Arizona, Sonia Hodgin volunteered with juvenile alternative programs to help children avoid going to jail. She learned that some of them wanted to be doctors or attorneys and paired them with adults working in those professions. “I wanted to make them start thinking with their heads,” she explains. “I also saw that some of them were being bullied by their probation officers, so I stepped in to help the kids.”
Sonia Hodgin is happy about the people she has helped through Formulaic Inc. and her volunteer work. “While I have been successful, it’s not about the money but about the people. I was recently offered an enormous amount of money for my formulas, but I refused to sell them. My business is to mentor people and to give them information that can change their lives, not to keep them from it.”
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