When Real Estate Investing Courses Are Wrong (Video)

Earlier this week I was “thrilled” to discover I had to drive to Nashville to personally attend a 2-day meeting of the Tennessee Real Estate Commission.

Fully expecting to be bored to tears, I was pleasantly surprised to find that eavesdropping on the commission contending with a month’s worth of real estate business is actually pretty darn fascinating.

So at the very end of the second day, I actually had the chance to address the commission personally.  I used the opportunity to pose a controversial issue that’s been burning a hole in my brain for years now:

“Can I legally pay a ‘finder’s fee’ to an unlicensed person for referring a real estate deal?  What about an ‘assignment fee’?  And what about two contracts with a double closing?”

Ok yeah, technically that’s three questions.

But the answer(s) I received might just surprise you.  It certainly reminded of an important lesson every real estate investor should learn.

So here’s a short video I made for you (from downtown Nashville) outlining what happened and the very important takeaway lesson…

Have any thoughts on this?  Please share them below…

About 

JP Moses is a roughly-hewn man-child who first got into REI after reading Rich Dad, Poor Dad back in Y2K and went full time in 2002. He's tinkered in everything from landlording to short sales to rehabs to Realtoring to REOs to notes to owner financing, blah, blah, blah...Till he finally stuck his flag deep into wholesaling and has since flipped somewhere north of a couple hundred deals.

JP's not a “guru” but also doesn't think it's a bad word. Among his core values are authenticity, creativity, big honkin' value, general fun-ness and being unshaven. He's super proud to be chief blogger guy at REItips.com and host of the free REIology podcast. He also thoroughly enjoys sharing his 53 best real estate investing forms with anyone who wants them. You should totally check that out. 🙂

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Craig T Reply

Arrgghh,

You had to ask?

Of course I am very interested in what you find out about TN, as that is where I am.

First time I have heard, or read this.

Can you share a online reference to the code?

Jeff Reply

Thanks for the tip!

I’m not in TN, but it does reinforce the idea that in the future or near future it may be wise to have a real estate license as an investor. Sometimes it’s better to be on the inside when the laws change (or in your case – currently on the books)than waiting in line to get in.

In Ohio it takes 120 classroom hours before you can sit for the exam. So getting a license isn’t something that happens quickly. You always need to plan ahead if you want to CYA.

JP Moses Reply

@Jeff – Different people will offer different opinions on the upsides and downsides of being licensed as an agent for investors. I think it’s more of a benefit than a detriment in most cases. But others will vehemently disagree with me. But the best of both worlds in my opinion would be to have your SPOUSE licensed and active in your business. 🙂

But either being licensed, or having someone VERY close to you who is, definitely has it’s benefits, including a fast track to relevant industry news, like you mentioned.

…jp

Bryan Ellis Reply

Wow – really great info JP! Pretty scary, though.

Ned Carey Reply

Hey JP,

I have had a number of people dispute me about bird dogging being illegal but sure enough I asked the executive director of the MD Real Estate Commission and got the same answer you did.

However in MD it appears assigning a contract is perfectly legal. Yes I have read the code.

I would be curious as to the wording of the Tennessee code. Not that any small investor wants to go there but I wonder if it would hold up to a serious court challenge.

Ned Carey’s last blog post..Where Do I Start?

Ernest Reply

This is a important issue with all the new real estate courses, promoting building a national buyers list to wholesale property to.

Tree-c Reply

CAN I AT LEASE BE A MORTGAGE BROKER TO PROTECT MYSELF, STARTING THE WHOLESALE BUSINESS.I AM TRYING TO GET IN THE DOOR TO MAKE SOME MONEY AS A BEGINNER.

Tree-c Reply

MAYBE THE COMMISSION WAS JUST JEALOUS,YOU NEW THAT PEOPLE WHERE MAKING MONEY FASTER THAT WAY .AND IT WAS A THREAT TO THE INDUSTRY,OR IT SHOULD HAVE BEEN ADDRESSED ANOTHER WAY TO THEM.

Tree-c Reply

IF IT WAS SO ILLEGAL THEN THERE ARE ILLEGAL ESCROW COMPANIES OUT THERE TOO,CAUSE THEY MAKE THESE DEALS GO THROUGH TOO.I JUST DON’T GET IT.I WONDER HOW DONNAL TRUMP GOT AWAY WITH IT

Tree-c Reply

YEAH ,I THINK YOU SCARED THEM WHEN YOU MENTION IT.CAUSE THAT’S HOW SOME OF THEM STARTED OR MAYBE NOT

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