Broker Licenses and LLC Questions

[John Campbell]

Hi, I’m a real estate broker in New York. I just got my broker license recently though I’m still with a brokerage that I was a salesperson with before.

A friend who is also a licensed broker wants to open a brokerage. He mentioned using an LLC. Thing is, he wants to be the 100% owner of the LLC and hire me to have my broker license attached to this LLC, and he will pay me either part of the commissions he makes or a flat fee which we still need to decide. He said he would be paying flat costs like rent, E&O insurance, MLS subscriptions. Besides my name on the license search he wouldn't need me to do anything. I think I'd be applying for a LLC Broker license or something like that, where it connects me with the entity as far as license search goes.

Has anyone heard about doing this? What are the implications? Can an individual license broker be connected with two LLC broker licenses? I may want to later open my own brokerage later. I've known him for a couple years but still trying to get an outsider point of view. What's the downsides? Sounds like I get some money on the side, and he does most/all of the work and pays for the costs.

Also, are there other costs associated with opening a brokerage besides those three? It would just be the two of us for now so there’s no employee salaries.