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4 perfectly legal ways to be a real estate investor with the RESA Law

This is a guest post by Ronald Cagape of LivingCasflow101.com

paydayThe RESA law is a comprehensive law intended to professionalize the ranks of real estate service providers – brokers, agents, appraisers, assessors and consultants.

However, this law has cast some doubt on the practice of buying and selling real estate. Let me share with you some reasons why you should go ahead and continue being a real estate investor.

1. Owners are still allowed to sell their property.

So, be the owner. Learn how to find good deals, raise capital and buy properties cash. Then sell the property as the owner.

2. If you can’t see yourself as an Owner then think of yourself as a Dealer.

Dealers are still allowed to sell property. RESA does not cover the business of being a real estate dealer. It really is a mindset.

You are not a broker or an agent and should not represent yourself as one if you are not. You are a Dealer. Therefore, buy then sell real estate. Use an Option-To-Purchase or a Contract-To-Sell to buy real estate and make sure you can Assign the contract.

Tell everyone that you buy and sell real estate. You’re not a marketer, you’re a dealer. In fact, while attending a review class for the Broker’s licensing exam of a well-known broker, I announced that I buy and sell real estate in front of the class. Even the broker wanted to hear about good deals!

The law is meant to prevent the practice of “colorum” agents and brokers. It’s not meant to discourage dealers. When you get to your 6th deal, just make sure to register your business as a real estate dealer with the HLURB and BIR. The game changes tax-wise on your 6th deal. But worry about your first 5 first.

3. Setup a Corporation and hire a licensed Broker

If you still insist on just selling real estate then setup a Corporation and hire a licensed Broker to represent the company. Your company will now be allowed to practice brokerage as if You were the broker. Your corporation, which is a legal entity of its own, is treated as if it’s a licensed broker as long as you have a licensed broker in your payroll.

4. Get a Broker to accredit you as a Real Estate Salesperson

The broker gets the authority to sell, you get a share of the commission.

As you can see, you don’t need to be a broker to sell real estate. But you do need to recognize the solutions. Have a mindset shift. You are a dealer not a broker/agent.

Why I took the real estate brokers  licensure exam

By the way, you might be wondering why I took the real estate brokers  licensure exam myself if there’s nothing to fear about the RESA. Here are my three reasons:

  1. A broker can only have 20 accredited salespersons under him. I’m getting a license to increase the limit to another 20 for our team.
  2. Networking. Brokers have their own buyer’s lists so I’d love to access their lists as well. Also, to access that list, it would normally cost me 5%. As a broker, I can lower down my cost to 2.5%.
  3. I personally like using an Exclusive Authority to Sell to control a property for sale without risk on my part. An Option-To-Purchase still works but I like putting an exclusive clause to my agreements. That’s just me. 🙂

What do you think?

Live A Brilliant Life,
Ronald Cagape

Ronald Cagape is a real estate investor and president of Cashflow Realty, a real estate brokerage company specializing in office space for sale or rent in Ortigas Center, Pasig.

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