Rental Management - Work Around

[Phillip Waltho]

I have been a property manager in multifamily for over 10 years and have decided to leave that to work in real estate investing. I had a question in regards to the requirements about having a real estate license to manage a portfolio for someone else. I manage my own portfolio of rental homes, and I have a friend who is interested in acquiring homes as well. They asked if I would manage it, but I know the law says that you need to be a licensed agent operating under a broker to be able to manage someone else's portfolio. If I'm reading correctly I believe that if you own the properties you can hire someone as an employee of the company to manage the properties without a real estate license. If my understanding is correct this is why most multi-family apartment managers do not need a real estate license. So my question is could my friend hire me as a W2 employee of his company at say $7.25 an hour (TX minimum wage) plus commissions based on how many properties I was managing for him and work around the technicality of the law?

[Peter M.]

@Phillip Waltho. Yes you could do that but you you are on a fine line. If your friend or a tenant is ever unhappy with your service they could report you. Another option is have a lawyer modify the entity structure and make you a partial owner as a minority/silent partner of 1%. Texas law also says you can manage for one person but once another person wants you to do this you'll be back in the same situation.