Questions about getting paid referrals from investors + my background

[Account Closed]

I am a recent graduate from Texas A&M university and a few months prior, I was considering getting into Wholesaling.

I learned that with Wholesaling, there were so many pitfalls concerning wholesaling, legalities that one needs to deal with when wholesaling properties, so I decided to look at another alternative route instead.

One of the areas that caught my attention was being a refferal partner for Real Estate and Private Equity investors.

Do you guys know what states such activities are going to be legal or illegal?

Also how do you set up contracts that are in your favor, such as being able to get referral fees that are more your in your favor?

[Chris Seveney]

Quote from @Account Closed:

I am a recent graduate from Texas A&M university and a few months prior, I was considering getting into Wholesaling.

I learned that with Wholesaling, there were so many pitfalls concerning wholesaling, legalities that one needs to deal with when wholesaling properties, so I decided to look at another alternative route instead.

One of the areas that caught my attention was being a refferal partner for Real Estate and Private Equity investors.

Do you guys know what states such activities are going to be legal or illegal?

Also how do you set up contracts that are in your favor, such as being able to get referral fees that are more your in your favor?

 If you are not registered with FINRA, you not only can find yourself being fined heavily but also behind bars. If you want to collect a commission you need to be licensed with FINRA.

Capital Raising: Understanding Commissions, Referral Fees, and Finders Fees | American Association of Private Lenders (aaplonline.com)

[Account Closed]

What is the process that requires me to be licensed with FINRA. What licenses do I need? How much will it cost to get me the licenses? I am curious and I want to do everything properly and safely!

[Melanie P.]

@Account Closed Some might view wholesaling as ethically problematic because the wholesaler doesn't have a duty to anyone but himself and is thus incentivized to make the worst possible deal for both the seller and the buyer in every transaction. However, in practice, the homes wholesalers take on have no other path to sale. The sellers either cannot wait through traditional timelines, their property is of very low value, or the property has major defects that make selling it and earning a 3% commission a money-losing endeavor. Wholesalers overcome these problems for sellers and create value for buyers by offering transactions otherwise unavailable in the marketplace. What are your legal concerns with wholesaling?

What you are proposing is a very risky venture both legally and professionally speaking. If you search these forums you will find countless syndication investors burned by paused redemptions, loss of most or all of their principal, investment promoters disappearing, etc. You are required to be licensed to market these investments to others. You have no experience that would make you a reliable source for these investments and if you lie about your experience to induce an investment that is a crime. 

If you've been offered compensation as a referral partner for RE Private Equity please share the details either here or by sending me a direct message. The arrangement is likely a crime. Investors believe their money is going into their investment account. Not paying fees and commissions when to unlicensed salespeople where none is disclosed. This is quite literally someone's stolen savings. If you know something, please say something. These practices must end. 

[Account Closed]

Quote from @Melanie P.:

@Account Closed Some might view wholesaling as ethically problematic because the wholesaler doesn't have a duty to anyone but himself and is thus incentivized to make the worst possible deal for both the seller and the buyer in every transaction. However, in practice, the homes wholesalers take on have no other path to sale. The sellers either cannot wait through traditional timelines, their property is of very low value, or the property has major defects that make selling it and earning a 3% commission a money-losing endeavor. Wholesalers overcome these problems for sellers and create value for buyers by offering transactions otherwise unavailable in the marketplace. What are your legal concerns with wholesaling?

What you are proposing is a very risky venture both legally and professionally speaking. If you search these forums you will find countless syndication investors burned by paused redemptions, loss of most or all of their principal, investment promoters disappearing, etc. You are required to be licensed to market these investments to others. You have no experience that would make you a reliable source for these investments and if you lie about your experience to induce an investment that is a crime. 

If you've been offered compensation as a referral partner for RE Private Equity please share the details either here or by sending me a direct message. The arrangement is likely a crime. Investors believe their money is going into their investment account. Not paying fees and commissions when to unlicensed salespeople where none is disclosed. This is quite literally someone's stolen savings. If you know something, please say something. These practices must end. 

I didn't dismiss the idea of looking into getting into wholesaling, but you have to deal with earnest money deposits and they are super expensive. Also a lot of rules are being dealt with.

I never took any refferal fees, but was curious what this is all about, pretty much. That is all.