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r/CommercialRealEstate
4
Posted by2 months ago

Can I run multifamily syndication while working at a brokerage?

While working as an agent at Marcus & 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?

10 comments
75% Upvoted
level 1

There are a few considerations here:

  1. Ethics guidelines for both M&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.

  2. M&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.

  3. 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.

Generally speaking, you're better off just being an LP if you're a broker and leave syndication to other partners of yours.

4
level 1

At larger companies like M&M there are a lot of rules around this. I’m guessing that at your company in the contract you signed or the policy’s they have in place there are a section or sections of the company’s 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.

3
level 2
Op · 2 mo. ago

Not many small shops have the deal size or amount of deals M&M does in multifamily, are you sure this wouldn't be allowed at M&M, even if my sponsoring broker knew and allowed it?

0
level 1

From a fellow M&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.

2
level 1

Is there any reason you haven't talked to your Designated Broker about this?

1
level 1

Yes, it is definitely possible.

If you’re a decent broker they’ll bend over backwards to keep you. They’ll want their cut, but I’ve know plenty that do it and they even do it internally with other M&M brokers.

1

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/r/CommercialRealEstate - Place to discuss Office, Retail, Multifamily, Industrial, Hotel, Land, and special purpose commercial real estate
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