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Updated over 11 years ago on . Most recent reply

User Stats

153
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17
Votes
Hal Cranmer
  • Real Estate Investor
  • Lakeville, MN
17
Votes |
153
Posts

Is Offering a Finder's Fee Illegal?

Hal Cranmer
  • Real Estate Investor
  • Lakeville, MN
Posted

I am thinking of ordering some business cards and get into wholesaling. I have flipped and rented out several properties and wanted to do some wholesaling to

a. Find some good properties to rent/flip

b. Make some extra cash for rentals and flips

Everything I read says offer a finder's fee on your business card for people to bring you leads. But I heard that these fees can be illegal. Can I put that on a business card and leave them around? Or will it get me in trouble? I'm in Minnesota if anyone has any local knowledge. Thanks.

Most Popular Reply

User Stats

198
Posts
49
Votes
John Fossetti
  • Investor
  • Pembroke, MA
49
Votes |
198
Posts
John Fossetti
  • Investor
  • Pembroke, MA
Replied

If you are not a licensed professional there shouldn't be a problem with giving referral fees but definitely check with legal consul. RESPA would be the ones to come down on you if you were an agent, I believe the law is something like you can only give $50 for a referral or something like that, You may need to have your bird dogs fill out a W-9 in case you pay them more than $600. I usually have a bird dog package to send to my referrers? Please check with your local ordinances for exact answers.

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