.+ People will work with you because (1) they like you and (2) it is profitable, so make sure you treat them well and that they are "fairly" compensated if they work with you. + Learn how to manage people.  

I know if they use the money there are tax consequences but I believe if I'm correct, the ROI would more than compensate their tax bill.

With a 1.7% vacancy rate in Fort Collins, I'm not worried about finding tenants at a competitive price, but am now questioning appropriate compensation for this service in a very hot market.Should I grin and bear it, or find another 'small' company?

How should I compensate the real estate agent, as in NY they can not get a referral fee or commission if it isn't a listed property (I have heard)Is there a way that others are doing these types of deals?

The only compensating factor would be an equal or greater increase in rents which I do not see happening with the explosion in new multi-family supply.That being said, if you have a good spread on your cash flow, it is still a good investment for the long-term.Cheers

Pay a commission or compensation to any licensee affiliated with the broker for performing services under this act; 2. with the written agreement of the seller, landlord, buyer or tenant share a commission with another broker who acted as a transaction broker, a subagent or an agent of the other party; and 3. pay a referral fee to a person who is licensed as a broker under the real estate brokers' and salespersons' license act or under the law of another jurisdiction, provided that written disclosure is made to the client of any financial interest that the broker has in the brokerage firm receiving the referral fee.

If you offer even a hundred dollars to compensate them for their time, you'd be amazed at how quickly you could get a written estimate back.

These are areas of compensating factors.

If you stay less than 6 months there is no refund -I am compensated for short-term residency, but the tenant has freedom to go without buying out a lease.  

You will not find a PM here for 5% and if you do they will have plenty of charges to compensate for the discounted price.