Compensation for Finding a Good Deal - Posted by Joe B

Real Estate Investing
#1

Posted by Evan on May 03, 2003 at 15:48:28:

Joe,

Recommend you check your state’s laws on this, might be legal, might not. Also, recommend you post this on the “RE Legal” CRE board…might get an accurate legal opinon there.

Has your group thought about forming Limited Partnerships (LP) or Limited Liability Company (LLC) for some of these projects? That why the “finder’s fee” might be legal… Anyway, recommend you do check with an attorney of this. Do you have an attorney in the REI group?

Last point. I’ve read lots of post on CRE’s boards and most of the problems presented could have been prevents with good RE legal advise. I’m finding can’t cut corners on legal assistance…it’s a necessary part on duing business! Paying an attorney is a lot cheaper then fighting a law suit later, and again pay lot more for the legal advise!

Best of luck in you ventures and please keep us posted on how this works out. It helps us all learn more about this very profitable business.

Evan
PS. I’m not an attorney…so these are just my ideas and opinions.

#2

Compensation for Finding a Good Deal - Posted by Joe B

Posted by Joe B on May 02, 2003 at 21:01:49:

We are in the process of establishing a new real estate Investors association. One of the members indicated to the Group that it is illegal to compensate someone (other than a licenced agent, broker, etc) for finding a good deal and allowing others with more time, experience, capital, etc, to take advantage of the particular deal.

What we are attempting to do is develop several sub groups, i.e., rentals, flips, rehabs, new construction, etc. Anyone in the group is eligible to present deals to the group and if economically viable, other members may elect to participate in a particular deal. Each deal is individual and there will be specific compensation allocated for people who find the deal, finance the deal and for those that do the actual labor and oversight, etc.

Please let me know if this scenario makes sense and your opinion on the legal issues mentioned about compensating the individual that finds the deal.

Thanks