Foreclosures
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated almost 15 years ago,
negotiation companies profit limits??
ok let me run this by you. i wont mention company names or locations. i have talked to a group of investors who have these laws down GREAT and im becoming an affiliate with them. i get 25% of the net profit the first 5 deals and 50% from there on.
here is where my mind goes off. these guys are smart, so i would think they may do this but im not sure if there is a max the negotiation companies can charge
so they have TWO companies. one negotiates (they still own it) and one takes the net profit. im paid out of the net the 2nd company gets. so lets say co A is the negotiator and Co B is the company with the contracts on homes and flipping them.
so co B buys the home co A negotiated for them down to 100k. then (simple numbers here no closing etc.)they resell for 140k following the new laws too (20% over purchase etc.) so technically there is a 40k profit i split BUT what if they pay the Co A a negotiation fee of who knows, 35k ( see they can do whatever or can they?) then only 5k flows down to co B and im paid 25% of 5k?
cant they do this and i cant say anything? it makes sense to me because they only pay short term capitol gains on the 5k when they pay me and the co b. the other 35k goes into the other company capital gains free then they can use it all or whatever and by the end of the year if that acount says $0 they arent paying taxes anyway? or they reinvest it etc. does this make sense? im just wondering if this is a possibility cause when i talked to the guy i started getting more ideas on what they could do and i find out im not getting much later on. Unless there is a limit to the amount the negotiation comapny can charge in the state of Ca i dont see why they couldnt... help??