Commercial Real Estate Question (Finding Equity)

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.

 

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.

 
DCDepository:
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.
it SHOULDN'T be, but a friend of mine in California tells me you need a real estate license to raise equity for a real estate deal. This is VERY weird to me, but he works with real estate securities offerings, so I can't discount his opinion completely.
 
Best Response
prospie:
DCDepository:

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.

it SHOULDN'T be, but a friend of mine in California tells me you need a real estate license to raise equity for a real estate deal. This is VERY weird to me, but he works with real estate securities offerings, so I can't discount his opinion completely.

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.

 

Fugit corrupti similique error aut esse. Illum voluptas quam qui architecto eaque exercitationem qui. Nobis commodi totam at deleniti.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”