Request from a "colleague"

I am brand spanking new to this forum and I just added my first colleague today. This person initiated contact with me. They are from outside of my area and told me that they were interested in buying a multifamily apartment complex in the $2-$3MM range in my town. They claimed that they are unable to find a broker in my area and asked me to keep an eye out for whats available. They offered me $10 for pics and $500 if it closed (with the undisclosed possibility of an increase if it turned out to be a really good deal).

My knee-jerk response was basically that $500 on a $2-$3MM deal doesn't sound like a decent offer.

So my question is should I have handled this situation differently? Was I being greedy? Is this someone trying to take advantage of me or was this a reasonable offer for someone who is unlicensed? I actually know of some properties that are very close to what this person is looking for.

Edited: 06/26/2010 at 08:03AM by John Shiraef

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

1501 posts
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Icon_minipost Apr 26 '09, 04:36 PM

Do research through your county appraisors office and go take a pic of all apt complexes that meet the criteria. If you find 50 of them then you have your $500 already.

According to your post he did not say that they had to be for sale!!!!!!!!

But seriously, if anyone pays you anything based upon a closing criteria then they must be registered as a broker in most areas. That is your first concern.

Edited: 06/26/2010 at 08:03AM

John Shiraef

· Chattanooga, Tennessee

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Icon_minipost Apr 26 '09, 04:58 PM

So would this transaction be legal and is that a reasonable offer? It was naturally assumed that they must be for sale.

Edited: 06/26/2010 at 08:03AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

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Icon_minipost Apr 26 '09, 05:14 PM

There is much here to read in the RE forum. Do a search under birddogging and you will find out that this has been discussed many times as to what is legal and what is not.

There is varied opinions on such.

Edited: 06/26/2010 at 08:03AM

Mark Davis

Real Estate Investor · New York, New York

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Icon_minipost Apr 26 '09, 07:27 PM

Originally posted by jawsette

But seriously, if anyone pays you anything based upon a closing criteria then they must be registered as a broker in most areas. That is your first concern.

I'm pretty sure that if you're dealing with a commercial deal, then there are no requirements for paying someone at close. Additionally, bird-dogs get paid at close all the time in residential deals, don't they?

Can someone in the know please verify this?

Edited: 06/26/2010 at 08:03AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

1501 posts
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Icon_minipost Apr 26 '09, 07:47 PM

here is a link to just one discussion on the matter.

http://www.biggerpockets.com/forums/51/topics/8046-birddog-legality-question-brokering-?highlight=birddog

And because people do get paid all the time that does not make it any less legal or illegal!

Edited: 06/26/2010 at 08:03AM