My broker wants me to pay a split on my wholesales

I would try to find a different broker that understand real estate investing and is going to help you not make your life or real estate career difficult.
Joseph

Time to find a new broker. Wholesaling is totally different then brokering. Did you explain to her what it is or did you bite your tongue? Closed mouths dont get fed. Maybe its up to you to explain it to her. Maybe she never dealt with creative investors that deal with this or maybe not even investor friendly. Find a new brokerage and dump her, its not your fault she didnt continue to further her education. What wholesaling is, is taking control of the property and assigning the control or rights you have to that property to another investor. You dont need brokerage commissions to put your name on a contract. In fact its not even a commission. Find something on wholesaling whether it be a book article magazine on wholesaling and have her follow up on it....

You can take the horse to the water but you cant make it drink. With that said....its time to give her the boot....

She has to go if you want to grow here...

I'll spare all the details, but there is no way I am going to leave this brokerage. It is amazing, to say the least. I can say with confidence that I am working with one of the best brokers in Michigan. I will see what information I can find that will prove that I am allowed to wholesale on the side and I will present it to her. She is not the type to insist she is right if I show her valid information.

This may be the key. What you do in your own time with the leads that you produce through your own completely separate marketing and do the transactions as a licensed agent but disclosing you are acting as an investor and not an agent you will be ok. Should not offend anyone IF they even need to know about it. As long as you work for the broker when you are supposed to be working and in NO WAY do any "investor" business with anyone remotely connected to your brokerage that should be fine.
It would be totally unethical to try and work with any clients or listings that come through the brokerage without approval and compensation to the broker.
If they are leads you generated yourself and you are doing it "off the clock" than it's no ones business as long as it does not effect your job performance.

Just my opinion,

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

wholesaling is based on contract law and not real estate law. While you are marketing a contract that the subject matter is real estate, it is not a real estate transaction. Would she expect a cut if you were assigning you insurance policy? If not, she should apply the same to your contract for assignment and understand the differences. Remember, the contract changes hands not the real estate parcel in a wholesaling transaction.

AHA! There it is---the loophole! THANK YOU, Bill!!! Contract Law!

Matt, Get involved at your local REI Club. Speak with other Realtors that are also INVESTORS...they would be a direct source. Seek professional legal guidance alongside this with a local real estate attorney. This way you will have the inside scoop on the tightrope you seem to be on. Find other agents/brokers who are actually assigning and/or wholesaling. Get living proof.
You don't want to jeopardize your day job.

Your broker would only be entitled to her part of the fee if she brought an end buyer. If she is not part of the assignment transaction then she should not be part of the deal at all. If she wants to lock up a property under contract, then assign it your one of your buyers then you can take about sharing the fee.

what michael and bill said are dead on. that said, don't conflict your investing business with your brokerage AT ALL. now if she wants to bring an end buyer to the table it's time to negotiate.
keep moving forward, rob

seperate, however, I think they could easily get muddled, and trying to prove seperation made be very difficult and lead to being fired. I know you said you have your reasons Matt, but just for knowledge you may want to try looking into different brokers, even if you don't use them, such as, Keller Williams known for working with RE Investors and some of the realtors are indeed investors themselves. Maybe if nothing else you could consult with them regarding your problem! All the best! Tammy

Your broker is asking for more than her fair share, maybe she thinks you and her are two agents working the same deal for a split, she needs to go. Find those who know what they are doing and work with other investors and are investors them selves, wishing you very well, Jim

The only way to be 100% sure about this is to talk to a real estate attorney. Initial consultation is usually free and you may be able to get your answer with a phone call. This will probably be the only way you will convince her that she is not entitled to a cut of your investment deals.

How is she entitled to what you earn on the side? Your Realtor job and investment business are separate.

Just because it's a wholesale doesn't mean there isn't a transaction to make a commission off of. It just means YOU aren't the one buying it.

My partner is also a Realtor, and her broker is absolutely fine with what we do on the side. Hell, shes probably even glad that we invest, because it just means more commission for her.

Thanks everyone! The comments here just confirmed what I was thinking all along. As for mixing the two, I would never take a lead from the broker and use it for investment purposes and not expect to pay a cut. All my leads come from my own investor marketing, and if I can't wholesale them I can then list them, but not the other way around.

I think you better understand than most that your broker does hold great power over your real estate deals. You can't do things on the side, regarding Real Estate transactions, without keeping your broker informed. (Your Division of Real Estate will back this up). You need to sit down with your broker and help her/him understand fully what you are doing. As an agent a great many of your wholesale deals will have both a fee from wholesaling as well as a commission for agents.

Take the time to read and understand what your state law is regarding what you must disclose. Your broker can have higher discloser requirements than the state. You need to get on the same page as your broker. If your broker refuses to see the truth and work with you then you will be left with the choice of finding another broker or getting your own broker's license, if you are qualified.

Best of luck.

DO NOT LEAVE YOUR BROKER, THIS IS A MAJOR PART OF YOUR REAL ESTATE SUCCESS AND THE MORE YOU HAVE CONNECTIONS WITH YOUR BROKER AND THEIR VENDORS, THE EASIER IT IS FOR YOU TO CLOSE AND GET PRIORITY ON NEW LISTINGS/DEALS . YOU HAVE ACCOMPLISHED ALOT BY HAVING A BROKER, DON'T BITE THE HAND THAT FEEDS YOU "KNOWLEDGE" I AM A LICENSED REALTOR IN NEVADA, MY BROKER ALSO WANTED A SPLIT HOWEVER I REALIZED THAT IF YOU MAKE A BUSINESS FOR YOURSELF SPECIFICALLY IN RE INVESTING, FIND AND CONVERT YOUR OWN LEADS, FIND DEALS ON YOUR OWN TIME. THIS IS YOUR BUSINESS- AS LONG AS YOU DON'T USE YOUR RE LICENSE # WHICH IS THE KEY TO DOING IT LEGALLY, BECAUSE ANY TRANSACTION DONE WITH THAT LICENSE NUMBER REPRESENTS YOUR BROKER. ACT AS AN INVESTOR WHEN YOU DO ASSIGNMENT DEALS IF YOU WANT TO SEE YOUR MONEY GROW. INTRODUCE YOURSELF AS AN INVESTOR NOT A REALTOR IN THESE TRANSACTIONS.

REMEMBER THIS IS WHY THEY SAY If the real estate agent name is more prominent than the broker's name, the agent and broker can be fined.

If you do these transactions you must use your name only. Because your name now became prominent on the contracts. if you choose to do it as a realtor Broker Name must be prominent and you owe broker whatever fee is agreed upon.

NADIA LEWIS

Check the Disclosure contracts you signed with broker vs. RE Division. But I think it Is best to let your broker know so that if anything goes wrong you have backup and you won't have too explain it under pressure when things go wrong.

If you can't come to an agreement get legal advice.

I am not engaging in offering legal advice. If you decide to use the following, do so after seeking competent legal counsel for your particular situation. When you write your offer put something similar to this in the addendum

"It has been made known to the seller that the buyer is a licensed real estate agent acting as a principal on his own behalf in this transaction and is entering into this transaction with the intent to make a profit. As such, buyer represents no interest other than his own in this transaction."

Since your broker wants a split on your assignments, ask her if she will also participate in the loss you incur on any rehabs that lose money.