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Updated over 6 years ago on . Most recent reply
![Christopher Dunson's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/506448/1707326209-avatar-christopherda.jpg?twic=v1/output=image/crop=360x360@256x221/cover=128x128&v=2)
Apartment Syndication differences with and with out RE licence
I have recently completed my first 8 unit BRRRR, and will be moving the primary focus of the business from flipping, and small multifamily to apartment syndication.
Recently, I took my RE license test for the state of NV and passed, but I have not associated with a broker because I would like to get more familiar with the advantages and or disadvantages of being and not being licensed while syndicating deals.
Thank you all for your time and insight.
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@Christopher Dunson only an attorney can give you legal advice and an opinion of how much risk you are taking on by doing or not doing any action, or having or not having any license. I'm not an attorney so I can't give you legal advice, but I can tell you about what I've seen firsthand as a licensed broker, flipper, investor and syndicator.
In my view, having a real estate license only adds to your risk if you are out there taking advantage of people. In litigation, the opposing side will argue that by virtue of your license you were more knowledgeable than their novice client and you used that knowledge to take advantage of them. This could certainly come up if you are wholesaling, for example. Let's say that you buy a little old lady's house for $100K when you know it's worth $200K and you immediately wholesale it to your friend for $150K. An attorney for the LOL could say that you had knowledge of the real estate market as a licensee and took advantage of their client by misleading them about the value of the house--and what you should have done was list it on the market to get her the best price. When syndicating multifamily property, you aren't doing any of that stuff, you are selling securities which falls under a different set of laws and has it's own risks.
I've bought well over 700 properties, at least 550 of which after getting my broker's license and not once has the existence of my license caused me any problem. Quite the contrary, I don't know how I could have possibly done what I've done without it.
I've also raised over $80 million from investors in syndications of a couple thousand multifamily units and several blind and semi-blind pools as well as development and self-storage. Not one time has the existence of my license even entered into the conversation except that I disclose it in my PPMs (which, by the way, does nothing but enhance my credibility).
Off-topic, but since it was mentioned several times above, I don't take commissions on my multifamily acquisitions. In today's competitive climate you need every advantage to get awarded a deal, and taking some of the broker's commission is a sure way to get your offer shuffled to the bottom of the stack.
So I guess my advice is to go talk to your real estate lawyer and your securities counsel about what you plan to do and get their opinion on your risk exposure and then go build a big business.