Real estate agent and investing?

Question

So my partner and I are stating a real estate investing company. We need to find the answer to this million dollar question. CAN AN AGENT BUY PROPERTY UNDER A BUSINESS NAME THE SAME AS AN INVESTOR CAN? we are thinking about having our brokers licenses somewhere down the line and we know the rules when it comes to agents purchasing under their legal name for the first 2 years. Any help would be appreciated.

John Dudas · Answer

I know many agents and brokers that buy their own investment properties. As long as you follow the proper disclosures you should not have a problem. I think you still have to disclose "Owner/Buyer is a licensed real estate agent in the state of..." so they know.

Richard Ball · Answer

@Lisa Beene things are as complicated as you make them. I am a licensed agent and buy rental properties.

John Mathewson · Answer

I am an agent and have bought quite a few properties under my LLC and have never had a problem with it. I guess it all depends on the circumstances. I have been in a few sticky situations being the seller and agent on a deal but nothing that disclosures can't fix.

Matt Foster · Answer

I'm a licensed agent with an LLC and I buy and sell just fine.  BUT........there may be restrictions.  For example if your broker lists Fannie/Freddie/HUD homes or other REO's, then there's most likely an agreement in place that restricts your ability as an agent to purchase these properties.  You might get by using your LLC but you don't want to risk getting fined or losing your license over it.  You'll definitely want to have that conversation with your broker to find out.

Ned Carey · Answer

Unless Michigan has some really weird and unconstitutional laws I don't see why you could not by in your own name or have a company that you own take title to a property.

I can't imagine why there would be a restriction on an agent buying a property for their own account for the first two years. I suspect it is an incorrect reading of the law.

James Holland · Answer

This was the reason I let my license go. Short answer, no. Not really. Depending on the state and the broker. But there are different disclosures when the agent is buying. It is not EXACTLY the same as an investor.   The simple way we used to get around this was take title under a Land Trust.  Simple form. Simple to get recorded. To keep track of all the deals we would simply name the land trust the property address. Because it really isn't that important for what we were doing. And usually just temporary and that land trust was only attached to that property. Next deal was a different land trust.  Different then a DBA or using your LLC.

Example: 177 Front Street Land Trust.

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