I am having a bit of an issue and would like some help on the matter if possible.
I currently work in debt placement for a commercial mortgage brokerage however, due to the nature of the brokerage (allows for significant freedom) I currently find myself in a situation where I am arranging financing for an assembly in a major downtown core of North America where my clients have secured firm purchase and sale agreements with the vendor but are lacking the capital to fully complete the assembly. As a result, my clients are currently sourcing equity partners simultaneously with debt placement (not uncommon in the commercial real estate space). My client has asked for my help in the matter of finding an equity partner to JV with. however, I would like to know legally how to protect myself (and get paid) if I do find a suitable equity partner. I have incorporated an "advisory" company a while ago but currently have yet to generate any revenue. I understand that I am not licensed to "find equity" and would like to know if legally I can charge the clients an advisory fee for finding a suitable partner and how I would go along to ensure I get paid.
Thanks.
In most states (and this is a state issue so this forum will probably be useless to you) the purchase and sale of a business constitutes real estate so you would need a real estate license to collect a "commission."
But really this forum is not the best place for this type of question, ask a lawyer.
Agreed that you need to ask a lawyer. There are legal forums that I've gotten some good answers on, but if you're talking real money then you need to get a real attorney. Although I don't think arranging equity for a fee requires a real estate license unless you are negotiating the terms of the real estate sale on behalf of a client. Equity would be almost an entirely unregulated field. However, I'm thinking there could be conflicts of interest between your day job of commercial debt brokerage and your "night job" of placing equity for debt deals that you're sourcing. More than likely you'd probably want to keep a professional wall between the two.
Yeah it is state by state, but I am sure that Cali has that law. You have to have a CA license to broker anything CRE related in the state (equity, debt, property). We tried to place a debt offering in CA one time and had to rescind our offering then work out a co-brokerage agreement with a CA broker in order to sign it back up. And I agree, it is a very weird law.
Yeah man ask a lawyer that's familiar with your state's RE law.
Same thing in Florida, its a state by state thing. Old wierd laws.
bump
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