Hiring a RE Broker to open a Brokerage Firm

Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes

Hi all,

I am in the state of Texas and a few of us are interested in opening a Real Estate Brokerage firm. One of the requirements is to have a licensed broker associated to the firm.

Are licensed RE Brokers willing to be hired, so the firm can use their license to conduct business?

Is this common or a bad idea?

What are the pitfalls?

What are the ways a firm can incentivize the RE Broker to stay with the firm?

Why would a licensed RE Broker do it?

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Ivy Wang

Real Estate Agent · Los Angeles, CA · Member since 2017 · 95 posts · 76 votes

Instead of hiring a broker to use their license, why don't one of you just get a broker license?

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
9y
They would do it for a salary. Yes it is common.
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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
9y
(Thread jack) I invest a lot in houston. What is your niche planning to be?
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Michael DangPro Member
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Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes
9y
@Russell Brazil Thanks for the reply.
@Cody L. Not really a niche but really just creating or building a partnership or network of complimentary services related to RE investors. For example, RE brokerage, then partnering with a developer, lender, accountants\CPA, and lawyers. This would give clients an almost 1 stop shop. Some clients may want land to develop then we can introduce them to developers, lenders, and vice versa. These would be companies that are reliable.
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Ivy Wang
Real Estate Agent · Los Angeles, CA · Member since 2017 · 95 posts · 76 votes
9y
Instead of hiring a broker to use their license, why don't one of you just get a broker license?
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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
9y
I opened my own brokerage before I was eligible to take the broker's exam. I retained an attorney with 25 years in real estate law to be our broker of record, and I pay him a broker's cut.
I get to tell clients that I have an attorney on staff, plus I get free legal advice.
He gets the income, plus he gets most of our closing business.
It's a win-win all around.
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Berny Petersen
Investor / Real Estate Agent · Atlanta, GA · Member since 2016 · 73 posts · 36 votes
9y
Brokers hire themselves out like that all the time, but the smart ones will want a pretty big upside. Agents must work under a broker, and the broker of record is responsible for the actions of the agents. Will you be hiring licensed agents as well? It sounds like you'll need them. What will attract experienced agents to bring their license to that brokerage - lots of leads, market share, branding, etc? Today the established brokerages as well as the start ups are spending a lot of money trying to recruit good agents and associate brokers so you'll need some kind of hook. Just some thoughts, best of luck!
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Michael DangPro Member
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Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes
9y
@Ivy Wang - It takes 4-5 years to qualify to become a broker and you need 30 or so transactions. So, yes that would be ideal but 4-5 years in today's markets is a long term view. I like the idea of opening a brokerage now with an associated or hired broker then over time obtain a broker license myself or with another partner is definitely doable.
@Charlie MacPherson - That is a great win-win idea. Didn't think of that.
@Berny Petersen - Most likely to obtain leads and business would seek to attract salespersons\agents. However, my initial inclination is to keep it small with quality and not large with quantity. Thanks for the insights about recruiting talent and marketing. Thank you!
Anyone know of any horror stories of other RE professionals hiring a broker?
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