Can I run multifamily syndication while working at a brokerage?
While working as an agent at Marcus &amp; Millichap would it be allowed or be legal for me to also run realestate syndication and purchase my clients property or have clients invest with me as an acting agent with syndication my company? Whats the right way to do this?
[{"id": "ijnlrsl", "text": "At larger companies like M&amp;M there are a lot of rules around this. I\u2019m guessing that at your company in the contract you signed or the policy\u2019s they have in place there are a section or sections of the company\u2019s rules regarding this stuff. Small shops tend to be more, get 100%, do your own thing, you set your rules. Larger companies because of liability, shareholders, bylaws, and typically larger commitments and risk have a lot of rules regarding brokers syndicating and buying property with clients and even just themselves.", "replies": [{"id": "ijnmkkm", "text": "Not many small shops have the deal size or amount of deals M&amp;M does in multifamily, are you sure this wouldn't be allowed at M&amp;M, even if my sponsoring broker knew and allowed it?", "replies": [{"id": "ijnmr3x", "text": "I\u2019m sure that it\u2019s allowed I\u2019m just saying it\u2019s likely under some potential conditions. I would talk to your sponsoring broker and see what they say.", "replies": [{"id": "ijnnfd4", "text": "Thanks for the repy, I mean if it's making my broker more money by getting leads to invest with my company and acting as an agent in the deals it would mean more commisons for the brokerage? In a sort of symbiotic realtionship right?", "replies": [{"id": "ijnqqri", "text": "It is theres just ethical rules.", "replies": [{"id": "ijnrsxg", "text": "Right, disclosing affiliations and intentions would be necessary to avoid getting sued from every direction...", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ijnwg7s", "text": "There are a few considerations here:\n\n1. Ethics guidelines for both M&amp;M and your local real estate licensing jurisdiction might prohibit some syndication activities if you're a licensee. At a minimum you should have a conversation with your MD and the licensing body to understand where there's liability.\n\n2. M&amp;M might be entitled to a portion of any fees or revenue you recieve from syndication activities as it could be construed as real estate trading revenue. Confirm in writing with your MD that this will be excluded.\n\n3. You should avoid acting in behalf of the syndicate in your capacity as a broker. This creates significant liability for you due to the various conflicts of interest and lack of alignment with your syndicate partners. Similarly you obviously can't bid on your own listings or deal on any assets or counterparties that you know privileged information about due to your activities as a broker.\n\nGenerally speaking, you're better off just being an LP if you're a broker and leave syndication to other partners of yours.", "replies": [], "depth": 1}, {"id": "ijoeidm", "text": "From a fellow M&amp;M agent to another, just go talk to your RM. Seriously as long as they get their cut, this shouldn't be a problem. Your RM should be very forward in telling how it is and how things are run. If you can't do it, then you know.", "replies": [], "depth": 1}, {"id": "ijr9956", "text": "Is there any reason you haven't talked to your Designated Broker about this?", "replies": [], "depth": 1}, {"id": "ijtb60e", "text": "Yes, it is definitely possible. \n\nIf you\u2019re a decent broker they\u2019ll bend over backwards to keep you. They\u2019ll want their cut, but I\u2019ve know plenty that do it and they even do it internally with other M&amp;M brokers.", "replies": [], "depth": 1}]