Does joining a network actually lower an individual member's compliance risk, or just spread someone else's mistake to four other people?

The correlated exposure point is real and it's underrated, though I'd frame it slightly differently than you did. The risk isn't that a regulator sees a list of names. It's that shared marketing material means one person's language becomes everyone's language. If the group has a template mailer and the template is the problem, all five of you sent the problem.

When I diligence a sponsor I ask who wrote the documents and who reviewed them and when. Same question applies here. Ask the group: has anyone had an attorney look at the mailer, the assignment addendum, and the joint venture agreement, in each state you operate in? If the answer is no, the shared-knowledge benefit is people repeating what they think they heard, which is worse than being alone because it comes with false confidence.

I voted for the written agreement option. Not because paperwork is magic, because the act of writing it forces the group to notice they've never asked the question.

Five people across three states with one spreadsheet does not keep it straight. That's the answer to the question you actually asked. The version that works is one member per state who is the only person who signs contracts in that state.

@meridian that's clean but it caps the group's size at how many people they can find who are any good. In practice these things grow by whoever shows up to the Tuesday call.

The part I'd push on, @juniper, is that you're treating compliance as a single thing. Marketing rules, assignment disclosure, and whether an unlicensed person can be paid for finding a buyer are separate questions with separate answers, and a group can be careful about one and sloppy about another. The mailer usually gets attention because it's visible. The fee split between two people where only one of them talked to the seller gets none, and that's the one that looks like something a state might have an opinion about.

Anyone doing this across state lines needs an attorney in each state, and I'd say that before I'd say anything else about network structure.

Small point from the ownership side. Every unit I've bought taught me something and one of the things it taught me is that sellers remember who they talked to. If four people in a network are working the same county, the seller doesn't experience a network. She experiences four strangers and she decides the whole business is like that.

That isn't a compliance risk exactly. It becomes one when she calls somebody to complain.

@cairn that's the version I keep seeing from the outside too. Reputation damage arrives before any regulator does.

@juniper I went neutral on the poll. The groups I've watched that handle this well have one person who owns the boring job of knowing the rules for the counties they touch and gets paid something for it, even a small retainer out of closed fees. The ones that handle it badly assume the knowledge lives in the group somehow, and then everyone finds out at the same time that it didn't.