All Forum Posts by: Katy Liu

Hey may I know how much it cost you on the E&O? I am a licensed agent in TX and trying to set up a property management with designed broker. The company would only have one license agent to conduct the business, which is myself. trying to fegure how much I need to pay to the E&O

I am sales agent who owns a property management LLC to manage my own property in TX. Now I want to expand the business and start managing others. I know if I don't have a broker partnered in my own LLC then I would need to conduct the business under my sponsored broker.

If I decided to conduct my property management business under my sponsored  broker, i have the following questions and need some helps,

1, can I still use my own property management llc to advertise or operate the business? if so, do I need to transfer my sales agent license to the LLC? The llc current has no license as it was built to manage my own property.

2, In the TAR residential lease and property management agreement, my broker will be mentioned in the agreement, but can my property management llc sign as broker associate ? or does it have to be myself only?

3, can I use my property management llc to sign a lease with the tenant?

4,  any recommendations on the RE attorney who could help me sort this out? In Dallas fort worth area.

Thank you

Does the LLC need to register with my sales agent license? I am trying to set up a property management LLC and operate under my sponsored broker. but I am not sure if the LLC i owned need to be licenced.

Quote from @Hamp Lee III:

You can outline a buyout structure in your operating agreement. I'm forming a LLC with other partners investing in fix and flips and I have one included.

The buyout can include a payment of any initial funds given and his percentage due at the time of the buyout or some nominal fee that you both agree to.

You know that this situation isn’t forever, and you don’t seem to be in a position where you’ve giving up a lot of company equity to get started. I agree with @Andrew Thomas Vedder.

This is your start. Find something that works for both of you and grow, knowing in a few years, you’ll have your broker’s license.

He’s giving you an opportunity to start with property management now. Allow him to “eat” a little from your table as well. Then…everyone wins.

I wish you all the best.

Thanks! A buyout is a good one but I am still struggling how to structure it as it would be my very first LLC and we don't really need to invest any money upfront to get it started. Thinking of 70/30 profit sharing structure, since I am the one only does the work, is it reasonable if the LLC pays myself first for a reasonable management fee before share the profit with the broker? Is it normal?

I am trying to propose a 90/10 split for standard broker/agency transaction commission (without knowing much about market fair price) and then offer 70/30 split for the clients that he brings in. By the time when I become a broker, we could revisit the and we may consider to partner if he could continue to share resource. For doing so, I don't really need to commit for a LLC at the beginning and deal with the possible broke up in the future.

Quote from @Andrew Thomas Vedder:

Hi Katy

What is your current commission structure? If it’s lower than 70/30 then maybe you suggest starting there. If your commission structure is supposed to give you more of a share of the commission after X amount of years working under that broker perhaps you make the split what your split would be after 4 years (maybe you’re 80-20 now but after so many years or X amount in total volume you’ll be at 90-10). Will your broker still be looking over your contracts as a property manager? Maybe working with him isn’t the best decision at all if he’s never been a property manager. Perhaps working under a current successful property manager would be best for your future. 

Just some thoughts. Best of luck to you. 

Thanks for your input. In fact, he is an experienced broker and has his own property management company. He is running the traditional long term leasing market but I want to start the business in the mid term lease market. It is different so he wants me start a new track instead of working under his current property management company.
in terms of commission, currently, he only charges a small amount of flat fee for the sell/buy transaction so I don't really have a benchmark on how much commission split it should be on the property management side. How much is the market standard split if the broker only manages escrow account? 

I am real estate sales agent and want to enter the property management biz. But in Texas, we need to have a broker license to run the property management company. I am thinking to start a property management with my broker but I would be the only one actually do the job like leasing, marketing and property management.

if you were me, how would you like to split the commission with your broker?

My broker purposes to set up a broker entity LLC and he wants to have 30% share because he could bring me clients. But I am hesitanting because

1) I will try to get a broker license in 4th year once I am eligible so I don't really need him that time. Then I may have trouble to buy out the property management company and do it on my own

2) I am unsure if his resource could really turn into money/income so I don't want to commit 30% share at the first place.

How is your company structure if you run a property management with your broker?

thanks!