Posted by Bill Jacobsen on September 14, 2007 at 09:54:42:
I am not sure I understand what you are doing but as I read it you have formed a partnership to wholesale properties. Your job is to find investors to ultimately buy the properties and the realtor’s job is to find properties for sale. The realtors are also collecting a commission. I am assuming that the realtors are not disclosing to their clints that they are selling the properties to a partnership of which they are a party?
My wife, as a realtor, has many investor clients. When she takes a listing she informs these investors that she has this property. They are free to buy if they wish. In that case she receives a commission from the seller and from the buyer. Of course with most properties sold, another realtor brings the buyer.
This seems easier, not requiring a partnership, and full disclosure is given to the clients on both side of the transaction.
Posted by Wayne on September 13, 2007 at 19:49:36:
My partner and I recently formed a partnership with a couple of realtors/investors.
The realtors/investors just bought a national franchise, and are using my partner and I to wholesale their deals. They’re representing the sellers (so it seems), collecting a commission, and then collecting 50% of the wholesale fee.
Is there any conflict of interest here? I don’t want to do anything that’s going to come back to bite…
Re: Is this a conflict of interest? - Posted by Rich-CA
Posted by Rich-CA on September 15, 2007 at 10:02:16:
Maybe, maybe not. Do they have an equity position in the partnership? If they are doing both side of the work, then it seems appropriate they get both compensations.
On the other hand, they really need o disclose to the seller that they are part owners in the buyer. That would create a conflict of interest for them as it could be seen as steering a seller away from their best buyer and into their own pockets.