All Forum Posts by: Scott Zach

@Michael Noto, good thoughts.  Hard to always know how much detail to provide.  I buy multiple properties per year from this realtor, so not worried about the realtor walking.  The plan is to let the realtor "roll their equity" from deal to deal, so in a fairly short time frame the realtor would have a larger % of future properties.  

So, a little more detail.  I would use this for properties that I buy which are in geographic regions where I don't live.  I would use it more in cases where I renovate and flip.  The realtor I use is very active in helping in the renovation phase (works with the contractors).  In my case, this would not be about need for capital, but rather a way to have the realtor's "skin in the game" when it comes to dealing with contractors.  So, @Jack Henry, I agree that the realtor needs to bring something to the table, and in this case it would be working with and holding contractors accountable.  Something I find difficult to do from afar.  The last piece of info is that I live in a market that is good for buy and  hold, but not for renovate and flip.  That is why I am doing the flips in other markets.

I have been introduced to a concept where the realtor used leaves some or all of their commission in the deal in exchange for a small piece of the action. Example: $100,000 house, 80% LTV, so I $20,000 required downpayment. I put $19,000 down and realtor leaves $1,000 of their commission in the deal to complete the downpayment. So they would be a 5% partner. Two questions:

1. Is anyone doing this, and what is your experience with it

2. What are the tax implications to the agent?