Question:
On page 88 [course manual] Raising Capital you state using a RE agents be careful not to create a conflict of interest, can you elaborate?
-Student
Answer:
You have to be careful when you work with agents because you get very close to working with listing agents and the agents that are going to hand you the deals. It could be a conflict of interest for them if they’re getting too close to you, in other words, if they’re going to lend you money because sometimes those agents have a ton of money and they want to participate in the market, but they don’t know how to do these deals, believe me. And I know some of this may sound silly. I borrowed money from some and used it on another agent’s deals. NEVER use it on the same deal they’re selling you. You have to be careful with stuff like that, that’s what I mean by conflict. You get a smoking deal from an agent and the agent calls you and says, “Hey, you know I want to be on this that’s why I’m giving you the deal,” WALK AWAY! Tell them thanks, but I can’t do that. It’s a conflict of interest for that agent but believe you me when the mustard hits the fan, you’re both getting handcuffs and free food and living arrangements for a while. So, you have to think before you do stuff, just do what’s proper.