Setting up a property management company with broker

[Katy Liu]

I am real estate sales agent and want to enter the property management biz. But in Texas, we need to have a broker license to run the property management company. I am thinking to start a property management with my broker but I would be the only one actually do the job like leasing, marketing and property management.

if you were me, how would you like to split the commission with your broker?

My broker purposes to set up a broker entity LLC and he wants to have 30% share because he could bring me clients. But I am hesitanting because

1) I will try to get a broker license in 4th year once I am eligible so I don't really need him that time. Then I may have trouble to buy out the property management company and do it on my own

2) I am unsure if his resource could really turn into money/income so I don't want to commit 30% share at the first place.

How is your company structure if you run a property management with your broker?

thanks!

[Hamp Lee III]

You can outline a buyout structure in your operating agreement. I'm forming a LLC with other partners investing in fix and flips and I have one included.

The buyout can include a payment of any initial funds given and his percentage due at the time of the buyout or some nominal fee that you both agree to.

You know that this situation isn’t forever, and you don’t seem to be in a position where you’ve giving up a lot of company equity to get started. I agree with @Andrew Thomas Vedder.

This is your start. Find something that works for both of you and grow, knowing in a few years, you’ll have your broker’s license.

He’s giving you an opportunity to start with property management now. Allow him to “eat” a little from your table as well. Then…everyone wins.

I wish you all the best.