NEW: BP Podcast 66: Flips, Apartments, & Protecting Yourself From Professional Tenants with Michael Blank

Hide this

From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1515 topics, 14401 posts — Last Post 04/19/14, 04:46AM

BiggerPockets Exclusive PRO Area

117 topics, 839 posts — Last Post 04/18/14, 05:47AM

New Member Introductions

10886 topics, 85618 posts — Last Post 04/19/14, 04:58AM

Real Estate Success Stories

396 topics, 6154 posts — Last Post 04/19/14, 04:10AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5935 topics, 46774 posts — Last Post 04/18/14, 11:05PM

Renters

643 topics, 5815 posts — Last Post 04/19/14, 03:38AM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/16/14, 03:58AM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

654 topics, 6264 posts — Last Post 04/19/14, 01:54AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3674 topics, 29452 posts — Last Post 04/19/14, 04:13AM

Real Estate Guru, Book & Course Reviews and Discussions

1133 topics, 11558 posts — Last Post 04/18/14, 11:03PM

Ask About A Real Estate Company

740 topics, 7318 posts — Last Post 04/18/14, 11:52AM

Real Estate Investing

Real Estate Strategies

Wholesaling

5603 topics, 43740 posts — Last Post 04/19/14, 04:24AM

Rehabbing and House Flipping

3333 topics, 30990 posts — Last Post 04/19/14, 04:50AM

Real Estate Development & New Home Construction

553 topics, 4683 posts — Last Post 04/18/14, 10:25PM

Innovative Strategies

703 topics, 6027 posts — Last Post 04/18/14, 08:48AM

Tax Liens, Notes, Paper, & Cash Flows Discussion

866 topics, 6677 posts — Last Post 04/18/14, 11:42PM

Rent to Own a.k.a. Lease Purchase, Lease Options

691 topics, 4871 posts — Last Post 04/18/14, 03:32PM

1031 Exchanges

143 topics, 1054 posts — Last Post 04/18/14, 08:41AM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1686 topics, 11285 posts — Last Post 04/18/14, 01:32PM

HUD, VA, and Tax Sales

414 topics, 3089 posts — Last Post 04/18/14, 12:05PM

REOs

1214 topics, 10570 posts — Last Post 04/17/14, 02:28PM

Short Sales

1534 topics, 13120 posts — Last Post 04/17/14, 04:44PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7201 topics, 70739 posts — Last Post 04/19/14, 04:55AM

Mobile Homes & Mobile Home Park Investing

638 topics, 5140 posts — Last Post 04/18/14, 03:22PM

Investor Basics

Starting Out

7699 topics, 60435 posts — Last Post 04/19/14, 03:35AM

Investor Psychology

431 topics, 6104 posts — Last Post 04/18/14, 06:08PM

General Real Estate Investing

4716 topics, 37183 posts — Last Post 04/19/14, 02:53AM

Real Estate Investor Marketing

1731 topics, 14093 posts — Last Post 04/18/14, 11:12PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1410 topics, 8985 posts — Last Post 04/18/14, 10:17PM

Multi-Family and Apartment Investing

1109 topics, 9224 posts — Last Post 04/19/14, 03:50AM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

639 topics, 4885 posts — Last Post 04/18/14, 02:57PM

Business Basics

Goals, Business Plans & Entities

831 topics, 7562 posts — Last Post 04/18/14, 04:25PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2785 topics, 20003 posts — Last Post 04/19/14, 03:34AM

Property Insurance

309 topics, 2045 posts — Last Post 04/17/14, 07:41PM

Personal Finance Discussion

328 topics, 2731 posts — Last Post 04/18/14, 04:33PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2832 topics, 19695 posts — Last Post 04/19/14, 02:40AM

Creative Real Estate Financing

1209 topics, 8768 posts — Last Post 04/18/14, 08:34PM

Crowdfunding Real Estate

35 topics, 461 posts — Last Post 04/18/14, 05:17PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1209 topics, 7988 posts — Last Post 04/18/14, 11:30PM

Bankers, Lenders, and Mortgage Brokers

441 topics, 1922 posts — Last Post 04/18/14, 09:39AM

Contractors

268 topics, 1678 posts — Last Post 04/19/14, 03:38AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1988 topics, 11603 posts — Last Post 04/18/14, 10:42PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

64 topics, 428 posts — Last Post 04/18/14, 04:22AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15015 topics, 53950 posts — Last Post 04/18/14, 09:07PM

Real Estate Events and Happenings

164 topics, 2505 posts — Last Post 04/19/14, 12:04AM

Off-Topic

Off Topic

Off-Topic

2905 topics, 32408 posts — Last Post 04/18/14, 05:31PM

Housing News & Real Estate Market

914 topics, 8351 posts — Last Post 04/17/14, 08:41AM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Rent to Own a.k.a. Lease Purchase, Lease Options » Do you need to have a real estate license to do lease options in Missouri?

Do you need to have a real estate license to do lease options in Missouri?

11 posts by 5 users

Signup

· Jefferson City, Missouri


I was wondering if you have to have a real estate license in order to do lease options in Missouri? ( I have been told that you must have a Broker's license to manage other peoples properties in MIssouri.)



· Belton, Missouri


I am unfamiliar with how to manage other peoples property. I would also like to know if this is true.

-Eddie



Multi-family Investor · Colorado


Hello Sandy,

I am unable to render legal advice. However, my opinion that as long as you initially lease the property either personally or an entity you control (LLC, c-corp) and then assign your interest 100% legit.

The real question is how viable is your tenant buyer? The lease option is a good strategy in my opinion but imho the quality of the person you end up putting in the property is crucial. To do this ethically.

The second question is absolutely you need to have a broker license to manage property for someone for a fee. I think subleasing under a master lease is 100% legit without a broker license.



· Jefferson City, Missouri


@Douglas Dowell Thanks for the advice. I really appreciate your input.



Multi-family Investor · Colorado


You bet @Sandy Uhlmann . Got to look out for my Missouri peeps. (I am a UCM grad..spent 20 years in KC.)



Real Estate Investor · Springfield, Missouri


@Sandy Uhlmann Hi!

You need a license in Mo. if you manage or facilitate any sale or lease for an owner.

If you own the property you will not need a license.

Mo. is not really agreeable to the equitable interest angle, doing one deal will slide by, doing 20 deals you will be seen as being in the business and doing contract to circumvent law.

All RE is local, you really need to look at what is customary in your area before leaning on strategies passed out on forums.

Sandy, you are in Jeff City, the state regulators are just down the street, I'd pay real close attention as to what is expected in the neighborhood.

I suggest you ask a local attorney as they will certainly know how such is viewed in that jurisdiction. :)


Financexaminer@real estate investor dot com


Multi-family Investor · Colorado


@Bill Gulley I am very interested in your experience in this arena Bill. It seems to me whether they like it or not the principal is sound. Have you seen any case law to the contrary?

In understand the license folks may not like it...but not liking it is not the same is saying its not legal.

Whats the difference between a master lease and doing it in a residential setting?

I agree if you want certainty you should consult local counsel.



Real Estate Investor · Springfield, Missouri


When a state regulatory agency issues a cease and desist order, small investors usually comply, they don't run to court, so case law may be hard to locate, in reality, it may also be a board action which may or not be public. In my experience I have found that most violations don't get to court, fines may be levied, orders issued and compliance required.

You may be an attorney, if you are you would be in a unique position to defend your actions, most aren't so error on the side of caution is prudent business.

There should be case law on the unauthorized practice of RE but I don't know of the specifics if they were dealing in leasing or options.

"Being in the business of" is usually defined by the degree of income derived by some activity vs investing. If most or all of your income comes from an activity and you actively participate in the activity, you are probably in business. Look to IRS findings as the basis. An investor who derives all or most of their income from activities is viewed by the amount of income in relation to their net worth and such activities being customary for someone at that level.

RE investors who don't address the "being in the business of" aspect really opens themselves up to other issues, business license infractions, insurance issues, local and state tax matters and perhaps IRS issues as well as professional license issues.

Regulators with the dept of finance here in Mo. take the position of "if it quacks like a duck and walks like a duck, it's a duck". There isn't a real estate brokerage in this are who hasn't been gigged for something, most object and usually they lose. I can't see the matter being different with an individual, just suffer the consequences, change and move on, IMO.

A master lease can certainly be done in residential. It may become an issue when you are seen as being in the business of leasing properties owned by others and using agreements to circumvent the intent of the law.

As I have mentioned before, you can describe your business activity and point ot the areas where you feel that exempt you from oversight and request a letter of determination from that regulatory agency. I have found that they are very fair, they really don't want to supervise some odd ball near miss type business strategy if they don't feel the need to. Professional license issues are really about protecting the public as the first concern, yes, there is money involved, but compliance is not about the money, it's about the public good and will be a consideration of any judge I'm sure.

You might bring these aspects up with a local attorney and see what their opinion might be. :)


Financexaminer@real estate investor dot com


Multi-family Investor · Colorado


I appreciate that view point @Bill Gulley

It seems even for me with a different war chest educationally and experience wise: velocity matters. Getting mired in an administrative law fight does not sound like a good time and def. not a formula for higher return on investment.

I think maybe commercial master leases are less prone to scrutiny because of the different perception of the need to protect the public. Sure, in residential much more consumer protection needed where in commercial we are rightly or wrongly perceived as big boys and girls who can protect ourselves.

Its great to hear your perspective on this stuff.



Real Estate Investor · Springfield, Missouri


And I totally agree, commercial is a different world! I'd say you can still have the business issues as to ones operations, but certainly there is a different perception. :)


Financexaminer@real estate investor dot com


Real Estate Coach · Scottsdale, Arizona


You just hit the nail on the head "Managing other people's properties." You don't need to manage anything, the reason I started investing in real estate is because I did not want to have a job. If you manage properties it is a job, as an investor doing lease options I don't have to manage anything and I get paid immediately, I get paid a monthly income and I get paid future profit without doing all the work. That is what investing is all about. If you are acting as an investor and not managing properties why would you need a license?





Sign up