Advice Needed on Commercial/Residential/Retail Properties to Purchase $100 - $300MM
Hi all,
I'll be visiting NYC with a group of Asian Real Estate Developers looking to purchase a prime commercial/residential/retail project in the city in the $100 - 300MM range. I'd like to present them with 10 good candidates for us to look at. My question is, where could I look at some listings in this category? Also, if you have seen these deals in the past, how would I - basically the matchmaker of sorts - be compensated if we do close on one of these properties?
Thanks a lot for the help!
I'm guessing your best bet would be to put boots on the ground (of sorts). You will find market information easier to come by if you contact or network among transaction professionals beforehand. Or, go on loopnet.com.
Edit: no idea on how your "referral" would get paid. Might be a matter of negotiations or licensing.
Hey Guys,
My grandma is a retired social services worker who is checking out NYC. She wants to start trading commodities, and I'd like to present her to the 10 of the best candidate banks, AUM over $5 billion only. Where can she get interviews? Also, when she closes her first deal, how is she going to be compensated?
You are repping a buyer, so if you get a fee it would be from your buyer for the most part. A 1% consulting fee or something. Most sellers would be big time brokers in NYC, most of the big guys who have those properties have a client list already and will cut you out of a fee.
Best of luck
FYI, it is illegal to take a fee for placing money unless you (your firm) is a registered broker-dealer. You can call it whatever you want--consulting fee, project management fee, etc.--but if the Securities and Exchange Commission links up your compensation as a placement fee then you will lose your fee and be fined, at best, if not charged with a crime. It's unlikely that fees for $100-300MM of placements will go unnoticed by the federal government.
If you're a licensed real estate agent, you can, of course, take a fee for negotiating the sale of the property/representing the buyer.
It is nearly impossible to enforce this.
It would be nearly impossible to enforce a $25,000 fee, but when you are talking $2 million, it's much more difficult to conceal and you're looking at serious fines and/or jail time. When you're describing your $2 million of income on your taxes, you commit tax fraud if you lie about it.
I wholeheartedly disagree with the rule/law, but I would not get on the wrong side of the SEC or IRS.
It's pretty easy to classify something like that as a fee for services rendered rather than an investment/placement commission. They could also throw him on the payroll of an entity.
A person reporting a $2M fee to the IRS would be much more likely to be audited by the state or federal revenue services, at which point you would be facing tax fraud and SEC rules violations. It would be incredibly stupid to "re-classify" your earnings.
It's not tax fraud if you are reporting the income whether it's 1099 or w-2. OP could easily enter into a consulting services agreement to provide site analysis, due dilligence, and and underwriting services. You don't need a license to be a developer or conduct market studies this isn't really any different. If op was hawking shares in a partnership or fund or marketing a property for sale that would be totally different.
Wrong. It's tax fraud if you lie about the origin of your income. BTW, this is a case where it's better to remain silent and thought a fool than to open your mouth and confirm it. I spent 6 months researching this with a securities attorney prior to opening a crowdfunding site. The reality is, the SEC is on to the scam that you are suggesting and the SEC absolutely will bust you for it. If the SEC can connect your fee with the success of a placement of money then you have committed a crime if you are not a registered broker-dealer. It's really that simple. And the SEC has seen and is on to the scam that you are suggesting. What you are suggesting is a crime, not a brilliant way to legally evade the law.
Like I said, do it with $25,000 and you'll probably get away with it. Pull this scam on $2 million in placement fees and you are f*cked for life.
You're talking about something very different. Spending $150mm on real estate in NYC isn't hard, and doesn't require securitization. An easy way to satisfy OP's assignment is to set up some new dev penthouse / retail condo tours and call it a day. Investors buy a few through their attorneys and investors give OP a little chunk of change back home. Parties even sign off that no other brokers were involved except [insert seller's broker].
By your logic being a for fee developer is illegal. This is a legal gray area that people have been operating in for decades. Color me shocked that your securities attorney erred on the side of caution. Also, setting up a crowd funding website is an entirely different ballgame. You are soliciting investments from the general public and placing it with a predetermined project. But yes, go ahead an continue beating your chest about how smart you are because you paid for legal guidance on one specific matter and are now trying to apply it to different situations even though you are not an attorney.
Thank you all for the helpful answers. In terms of the fee, I was trying to gather information on whether that was something typical aside from brokers, which, I wouldn't really be in this case. The parties interested are friends of a business partner/close friend. My apologies if the request for information was in any way controversial. Thanks again for the advice.
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