Richard Hutchinson targeted teenagers from homes that were struggling financially and paid them to carry out business tasks for him.
Hutchinson, 71, also drove one teenager to Edinburgh's Calton Hill and introduced him to a rent boy before demonstrating on the victim what he did.
He told another underage boy that he would be wearing nice suits and would get paid good money for escort work but would need to practice on him.
Hutchinson, of Ashgrove Place in Musselburgh, subjected three teenagers to indecent assaults between 1996 and 2002, the High Court in Edinburgh heard.
Advocate depute Steven Borthwick told the court: "The accused would regularly ask the complainers, who were children at the time, to deliver business leaflets for him in exchange for money."
The prosecutor said the child victims "came from homes that struggled financially".
The court heard that during the subsequent abuse two of the victims were sick after sex acts.
Mr Borthwick said that, after paying one 15-year-old for working for him, Hutchinson had collected the boy and drove him to Calton Hill.
He said: "The accused introduced the complainer to a male whom he described as a 'rent boy'. He went on to explain to the complainer that as a 'rent boy' this male performed sexual tasks for money."
The teenager did not fully understand and asked questions and Hutchinson began touching him and told him: "This is what he does." The boy froze and said nothing.
Hutchinson's offending behaviour towards the youngster escalated in seriousness with him getting the victim to perform sex acts on him.
Mr Borthwick said much of the abuse occurred after Hutchinson had driven the victim to remote locations after dark.
Hutchinson offered a 13-year-old boy money to help him at his work but afterwards drove him to a wooded area and molested him.
The prosecutor said that the victim did not say anything, adding: "He froze due to shock and was petrified."
Hutchinson then made the child carry out a sex on him and, after it, the victim was physically sick in the street. The abuser gave him £30 to £40.
A week later the boy was outside playing when Hutchinson turned up and drove him to a secluded area and carried out sex acts before giving him cash.
He gave the youngster a phone and would text him and arrange meetings. He would threaten him if he did not turn up and said he would tell everyone what had been happening.
Mr Borthwick said on one occasion Hutchinson took the victim, when he was aged 14, to a bed and breakfast and gave him drink before performing a sex act on the intoxicated child.
Hutchinson arranged to meet his third victim, who was 15, after saying he had work for him and drove him to the Aberlady area in East Lothian.
"Throughout the drive the accused spoke to the complainer about an escort job and told him that he could make a lot money having sex with people," said the prosecutor.
Mr Borthwick added that Hutchinson went on to tell him he would need to practice on him before he could put him forward for that line of work.
The teenager initially told him he did not think he wanted to get involved, but Hutchinson later contacted him again and took him to a secluded area and spoke to him again about an escort agency and told him he needed to practice, and carried out a sex act on him.
After further incidents Hutchinson gave him £20 each time.
During the final indecent assault Hutchinson told him if he took part in escort work he would be wearing nice suits, going to nice places, having nice meals and getting paid good money.
He then instructed the teenager to perform a sex act on him after which the victim was sick in the car. Hutchinson gave him £20.
Hutchinson was detained by police in 2017 and when officers told him he was being arrested for sexual assault he replied that he could not believe it.
He admitted indecently assaulting one victim on various occasions between November 1996 and November the following year at unknown locations in Edinburgh and the Lothians, when he appeared in court on Wednesday.
He also admitted an indecency offence against a second child victim between March 1998 and March 2000 in Edinburgh and the Lothians and indecently assaulting him between March 2000 and March 2002.
He further pled guilty to indecently assaulting a third victim at an unknown location in Aberlady and elsewhere between December 1999 and December 2001 on various occasions.
Defence solicitor advocate Jim Stephenson said the first offender has heart and lung problems.
He said: "He realises he will be punished. It may well be a custodial sentence is the only outcome possible in this case."
But Mr Stephenson asked for Hutchinson's bail to be continued while a background report is prepared on him ahead of sentencing.
A judge told Hutchinson: "I have no hesitation in refusing that motion having regard to the gravity of the present offences and the public interest."
Lord Pentland remanded him in custody prior to sentencing next month, and Hutchinson was placed on the Sex Offenders' Register.