I am a Realtor in the state of Florida and my partner and I will be starting an investment company. We are wanting to begin with with wholesaling then transition into fix & flips over time. However, I am not quite sure as a licensed realtor if I would have to give my broker a cut.I won't be acting as a realtor in the wholesale transactions only as an entity (LLC). The only time I would present the realtor hat is when we get into selling the homes we flip.
Just want to get clarification on whether my broker gets a cut when we begin wholesaling as a business since I am a realtor.
You can always ask your broker and they will tell you.
Thank you for the prompt reply. Good to know! I will still inquire just wanted to get some insight before mentioning it to them.
Depends on your independence contractor agreement.
Keep in mind though that once you become a licensed individual, you can not act autonomously in any real estate activities. Once licensed, all your real estate activities, not just your sales, will be subject to both your brokers supervision as well as the oversight of your state real estate commission/Dept of licensure.
@Russell Brazil @Curt Davis Thank you for your input. Maybe I worded it wrong because I do know being licensed at any point my transactions can be subject to review for whatever reason under my broker and as a business owner. But if my LLC is with another individual who has no ties to my broker and we are signing contracts on investment properties ,what happens then ? because my partner is not an agent. If I get clarification on how to operate as the CEO of another entity having a partner I would feel more confident in how I navigate both lanes.
@Celeste McKnight why would you wholesale if you can list the property and collect a commission?
People say “get licensed so you can wholesale legally”, but it makes no sense to me because anything you do “as a licensed agent” has to be done under your broker (with broker agreements), so.....any “wholesaling” you do obviously won’t have your broker listing/selling agreements involved so, “you are not acting as a licensed agent” therefore your “wholesaling activities” will still be illegal under FL law.
@Curtis Davis Ok got it I think I was understanding wrong when I was listening and reading other platforms and wholesalers. Thanks you all.
@Wayne Brooks But there must be brokerages that allow one to wholesale. So I wouldn't say it is illegal all around. There must be ways for it to work since there are plenty of agents performing such transactions under their broker. So is it really illegal or is it certain practices that would make it illegal? I follow so many groups and there are realtors legally wholesaling but still wearing their "realtor" hat they use it as an advantage since we deal with researching and becoming more knowledgeable on market data in order to make sense of the numbers in a wholesale transaction.
Legally YES. Without funds going through your broker you can be charged with brokering without a license. But again--why give away 25,50K. Makes no sense.
@John Thedford I know someone personally who is an agent and and does wholesaling under their investment company name and their broker is perfectly fine with it being totally separate. It is not illegal if you disclose that you are an agent in the contracts but not representing anyone in the deal as an agent . If there are people legally doing it how can it be labeled illegal. I didn't read that wholesaling was illegal under Florida law it's how you go about doing it I would assume that would raise red flags.
DBPR told me they have cases open against agents for not running fees through the broker. Personally I don't have that problem because I NEVER give away 25K or more.