??? Ok, I am starting to buy pre-foreclosures and I need some advice. After buying the FSBO’s, foreclosures, REO’s, or pre-foreclosure I am planing to use my wife to market the property. My wife is active Realtor and can put the property in the MLX giving the property more exposure and having only people with letter of approval from the bank. Now the downside is that I will have to pay a commision of at least 5% but if my wife sells it she will be getting all the commision ( she has a 80/20 split) .Has anyone done this before.? What Iam thinking is that my company is an LLC and the commisions payed for the sale of the property can be tax deducted from the actual net profit of the LLC but in actuality my wife stayed with most of the commision… What do you guys think… ???
Actually, Skywalker, this is nothing new.
I’ve known several investors whose spouse is a real estate agent and the investor spouse buys the properties and the agent spouse lists and sells the properties.
It would be a good idea to run the idea past your attorney, her broker, and possibly even the local REALTOR board just to make sure that there is nothing illegal about it in your state, and that there is no conflict of interest, but it should work out okay.
NOTE: Even if the property is deeded to your LLC, your wife may have to disclose that she is an owner of the property, or that she is associated with the owners in some fashion. If so, this may discourage some buyers from looking at the property.
Roger
Did you find anything out on this? I am a Realtor who will start investing via my husband and my LLC. Any info on this you have would be great.
I agree with Roger, check it out. Single member LLC’s or other Corporation entities aren’t treated the same in the courts as multi-member/investor. If you are sued and there is some kind of illegal activity proven then the corporate veil is demolished quite easily in those entities. It gets more complicated if you live in a community property state where what yours is hers and vice-versa. In your state, she may have some of the same disclosure requirements as if she was a member of the LLC and you may have to disclose your wife is an agent.
It can be done just check it out with the state and Realtor board.
I’ve been doing the same thing in Georgia. Actually, I’m a realtor and when I get short sales I list them and have my wife take out financing for the property if I don’t do a double close which I have not really been doing lately. Here is a related article about short sales and real estate agents that you may find helpful.
http://www.shortsaledeals.com/indexrealestateagentspart1.htm
JK33