I am new to real estate and I recently was hired by a real estate investment firm part time unpaid to help them find off market multi-unit properties. If I was to find them a property and the deal was to go through I would get a portion of the acquisition cost. I no longer work with them due to the fact that I still work a full time job, but I am thinking of venturing out on my own. I have a sales background and wanted to reach out to property owners and then deliver potential off market listings to real estate investors in my area. Only problem is I am unsure of the legal parameters here as I am not technically working for an investor and I am not technically an agent or broker. Would I still be able to be paid an acquisition fee. Thanks in advance for the help!
First you need to get yourself educated so you know what a good deal is.
Second, im sure you can come to some sort of an arrangement with the investment company if you find a deal.
where are you based??
I am in North Jersey/NYC area.
I know there are assignment/referral fees for these kind of transactions. I just want to make sure everything is legal.
I am just unsure if my business partner and I would be able to work out a fee paid to us by the investment company - or if we would need a commercial broker involved?
@Sophie Lavet It looks like you're interesting do doing what's often called "House Wholesaling". There are many topics posted on this subject. You'll want to check your local laws and attend a local realestate meet up... There will most likely be people there that are doing the same thing and you could learn from them and get more information about the local laws.
It's a great way to get started and with your background you'll be a step ahead.
Follow up question here - how were they legally allowed to pay me out a portion of the acquisition fee?
@Sophie Lavet These types of rules vary by state so you will want to check your local laws to be sure. Many times these fees are not being paid to you as a "broker" or "agent" but you are being paid after the closing for the work that you put into the deal. I don't see any issue with this as long as you are not posing as the licensed professional. I know many brokers, investors, and agents that will pay out referral or finder's fees for helping with this listing.
@Sophie Lavet My suggestion is to start going to local REI clubs and meeting other wholesalers and investors. You can find a ton of RE clubs via Meetup site. I'd highly recommend in your case to check out the one ran by Nick Tang (he has at least three locations in NJ and one in NYC), and the one by Paul Kim and Glen Galucci.
I agree with what @Ray Loveless said, it sounds like you are looking at a wholesale setup, or something that closely resembles it. I am not an expert in wholesaling but I know there are a couple of different ways to go about it and a couple ways to profit. I would recommend doing some searches for "wholesale" in the BP forms and I know there have been some good podcasts with wholesalers from entry level up to multi-million dollar business owners.
Thank you all for the responses! I really appreciate it