Real Estate attorney -- any references? Do I need to form an LLC here?

[Jason K.]

I've got a concern I need answered about birddogging. I am licensed.

1. As a licensed investor in Texas, what actions must I take in order to be able to pay a partner (birddog), where it is not considered paying an unlicensed individual real estate associated "commissions" or "fees". Must I set up a LLC? Limited Partnership? Please explain or PM me. I must also note that I am not acting as a realtor in this scenario, and am just wanting to reward & split my earnings with my partner/birddog.

In essence, at what point can birddogging become ethical and legal, and not get me into trouble waters?

:oops:

[J Scott]

First, to say that bird-dogging is illegal is a very broad statement. Depending on what the bird-dog actually does, it may or may not be legal. For example, if the bird-dog simply sees a property on the street that looks boarded up, digs into the county records to find the owner's name and then brings you the address and the owner's contact info, I don't see where any laws were broken.

As for how you could pay the bird-dog, I'm not an attorney, so take this for what it's worth. But, it seems your best two options are:

- Enter into an Independent Contractors relationship with the bird-dog and pay him a commission that is 1099'ed at the end of the year;

- Create a business entity and hire the bird-dog as an employee. This will require you to pay taxes on your payments and will have other labor law implications that you'll have to be aware of.

Again, I'm not an attorney, but those seem like the two best arrangements. That said, you may also want to check with your local real estate commission to get their input...