Articles from our library
Syndication Basics
Looking for something? Search it below:
How do I Create a Substantive Relationship?
Question: If I am doing a 506(b) offering, do I still need a pre-existing substantive relationship before I can solicit from an Accredited Investor (AI)? If “yes,” is there still any waiting period after I get that Accredited Investor to sign a…
Top Legal Mistakes Syndicators Make and How to Avoid Them
Raising capital through syndication is one of the most effective ways to fund real estate or business ventures—but it’s also one of the riskiest if you don’t follow securities laws. Many new syndicators jump into deals without fully understanding…
Syndicators Beware: These Acts Can Trigger Personal Liability on a Non-Recourse Commercial Loan
In the world of real estate syndication, non-recourse commercial loans—including Fannie Mae, Freddie Mac, and other commercial debt—are a popular tool for shielding syndicators from personal liability. However, buried in the legal fine print are…
What’s in a Securities Offering?
A private placement securities offering includes a number of documents, which collectively comprise the offering package. Each document has the specific purpose described below: The Private Placement Memorandum The private placement memorandum…
Should You Really Start a Fund?
We get potential clients who reach out to us every week who want to start a fund. While we could simply take their money and set them up with fund offering documents, we actually talk a lot of people out of doing a fund. Why? Because they don’t…
Why Most First-Time Blind Pool Funds Fail—and How to Beat the Odds
Launching a Blind Pool Fund sounds like the dream shortcut to growth for new real estate capital raisers. Instead of syndicating deal by deal, these funds allow you to raise money upfront and deploy it across multiple future opportunities as they…
Raising Capital in the U.S. on a Work Visa: What Foreign Nationals Need to Know
Many entrepreneurs and investors who come to the United States on work visas want to start real estate investment businesses and raise capital. Securities Laws for Raising Capital on a Work Visa U.S. securities laws are designed to protect…
What is Real Estate Syndication?
If you have a self-directed IRA or substantial investment funds, you probably have considered investing in real estate. But perhaps you have concluded that you lack the funds to invest on your own. Or maybe you simply don’t want to deal with the…
What’s in a Securities Offering?
A Private Placement Securities Offering includes a number of documents, which collectively comprise the Offering Package. Each document has the specific purpose described below: The Private Placement Memorandum The Private Placement Memorandum…
How to Structure a Real Estate Syndicate
Although there are numerous ways to structure a commercial income-producing property, the following model describes a typical 2 Class syndicate with equity Investors and a separate management entity. How to Structure a Real Estate Syndicate In the…
Joint Ventures or Securities – What’s the Difference?
Are you selling securities or joint ventures? If you are using other people’s money for your real estate investments, you need to know the difference between a joint venture and a security. The questions you need to ask are: Will investors invest…
10 Steps to Becoming a Successful Real Estate Syndicator
Here’s a 10-step checklist on how to start a Real Estate Syndication: 1 – Select an asset class Figure out what asset class you want to buy (multifamily, shopping centers, hospitality, self-storage, development projects, single family residential,…
Advanced Basics
What Can Happen if You Don’t Comply with Securities Laws?
The importance of complying with Securities Laws can never be emphasized enough. Securities regulators, including both the Securities and Exchange Commission (SEC) and state securities agencies, routinely conduct securities investigations into…
How to Name the Entities in Your Syndicate
If you are a syndicator, you should pick a naming convention for all of the entities in all of your syndicates and stick to it. You can have as many as five entities in a syndicate, but most commonly, you will only have two. If you can figure…
Class B Catchup Distributions Explained
When you are syndicating a cash-flowing property, you must determine how you will distribute cash to your investors at various stages of your company. This is called a “waterfall”. At a minimum, you will need to determine the waterfall for cash…
Can I Use a Consulting Agreement to Raise Money for Someone Else’s Syndicate?
We get this question all the time, and our answer is always the same. Only a licensed securities broker-dealer can raise money for a third party and earn a commission. As such, you cannot enter into an agreement to be an outside consultant or…
Real Estate Attorney v. Securities Attorney: What’s the Difference?
If you are using other people’s money to buy real estate, you will need two different types of attorneys to help you get your deal to the closing table. A real estate attorney to help you with your purchase and sale agreement, to help with your…
Paying Finders Fees in a Real Estate Syndication
Question: What are the rules regarding paying unlicensed “finders” to refer investors to a real estate syndication? The Issuer Exemption Under Regulation D, Rule 506 Since passage of the National Securities Markets Improvement Act of 1996 (NSMIA),…
10 Things to do When You Can’t Find Deals That Make Sense
Market cycles are just that – cyclical. The current market cycle is making it hard to find deals. Prices are high; cap rates are low; interest rates are on the rise; and the good deals seem to be drying up. If you have chosen the path of a real…
Blind Pool, Syndicate, SeriesFlex or FlexClass: Which Fund Structure is Right for You?
There are multiple ways to set up a private equity fund. The most common types are described here. FUND STRUCTURES Whole Fund Model Under the “Whole Fund” or “Blind Pool” model, investors purchase interests in a pooled investment fund (the Fund),…
The Legal Aspects of Raising Money from Private Investors-Rule 506(b)
QUESTION: What Securities Laws Apply to Raising Money from Private Investors? Securities Laws The Securities Act of 1933 was enacted in the wake of the stock market crash in the 1930s after many investors lost money to investment “Promoters” (aka…
You Can’t Afford to be in Denial About Securities Laws
If you are raising money from private investors in the United States (other than from hard money lenders who are in the business of lending money), then you need to qualify your “offering” for an exemption from securities registration (by following…
Do I Need A PPM Lawyer To Draft A PPM?
“Do I need a PPM attorney to draft my securities offering documents? And when do I need a PPM?” The first question is akin to asking whether you need a surgeon to perform brain surgery. After all, everyone has a knife in his or her kitchen and…
Other articles
Pitch Deck vs. Investment Summary: What’s the Difference in a Private Securities Offering?
Raising private capital under Regulation D — whether under Rule 506(b) or Rule 506(c) — requires accurate, transparent, and balanced disclosure. One of the most common points of confusion among new syndicators and fund managers is the difference…
Unlocking Startup Funding: Essential Insights from the New SEC Report
For anyone currently or contemplating raising capital for a small-business or startup (which includes many of our clients), we encourage you to study the recently released 2025 staff report from the SEC’s Office of the Advocate for Small Business…
Do Real Estate Syndication Sponsors Need NDAs With Investors?
One of the most common questions we hear from new and experienced syndicators alike is whether they should require investors to sign a Non-Disclosure Agreement (NDA) before reviewing a deal. The short answer: In most real estate syndications, NDAs…
Is Your Joint Venture Actually a Securities Offering?
Many sponsors assume that if they form a joint venture and call their partners co-owners, they can avoid securities laws. Unfortunately, regulators do not care what you call the deal. They care about how it actually works. When multiple passive…
Multifamily Syndication Models That Stand the Test of Time
This article looks at the Lifestyles Unlimited (LU) Syndication Model, including structure, benefits and why many passive investors like it. Lifestyles Unlimited (LU) is a real estate education and mentoring network that teaches investors how to…
Syndicators Beware: These Acts Can Trigger Personal Liability on a Non-Recourse Commercial Loan
In the world of real estate syndication, non-recourse commercial loans—including Fannie Mae, Freddie Mac, and other commercial debt—are a popular tool for shielding syndicators from personal liability. However, buried in the legal fine print are…
Unveiling the Hidden Aspects of Securities Offerings: A Guide to Legal Fees and Timing
If you’re exploring a Rule 506 Syndication, a blind pool fund, or a Series LLC offering, you’ve probably noticed that attorney pricing is all over the map. Some firms quote $10,000; others quote $60,000 or more. So what do these prices actually…
What Can Happen If You Conduct an Illegal Securities Offering
Introduction: Common Violations in SEC Enforcement ActionsWhen the Securities and Exchange Commission (SEC) brings an enforcement action for anillegal private securities offering, the most common allegations involve fraud,misrepresentation, and…
Small Business Investment Company: A Strategic Tool for Funding and Growing Small Businesses
For entrepreneurs and fund managers looking to scale U.S.-based small businesses, the Small Business Investment Company (SBIC) program offers a compelling—though often misunderstood—option. SBICs allow private fund managers to access low-cost…
Why Guaranteed Returns Are Prohibited in Securities Offerings
Background Under U.S. securities laws, issuers are strictly prohibited from offering or implying “guaranteed returns” to investors in connection with the sale of securities. This applies to both public and private offerings, including those…
How Savvy High Net Worth Investors Use Passive Real Estate Syndications to Build Wealth
For high-net-worth investors, real estate syndications offer the opportunity to particiate in institutional-quality investments with attractive returns. While some advisors recommend taking an “active” role to exert more control or avoid securities…
Thinking of ‘Borrowing’ Money from Your Syndicate? Think Again…
If you’re raising private capital—even from friends or small groups—think twice before diverting investor funds for personal or unauthorized purposes. Recent Securities and Exchange Commission (SEC) enforcement actions show that smaller, private…
What Can Happen If You Conduct an Illegal Securities Offering
Introduction: Common Violations in SEC Enforcement Actions When the Securities and Exchange Commission (SEC) brings an enforcement action for an illegal private securities offering, the most common allegations involve fraud, misrepresentation, and…
How Asking AI the Wrong Questions Can Hurt You
When AI Adds Terms You Didn’t Say: The Lease-Option Trap This article continues our discussion about the risks of using AI tools such as ChatGPT for legal research. One of the most common (and dangerous) patterns we see is when clients start with a…
How to Syndicate Using a Series LLC in Any State
This article is part of a broader conversation about the risks of asking legal questions on ChatGPT or other AI tools. Many clients don’t realize they’re asking the wrong questions—or missing the critical follow-ups—and as a result, they draw…
Rule 506(c) Accredited Verification of Self-Directed IRA Investors
The United States Securities and Exchange Commission’s (SECs) Regulation D, Rule 506(c) exemption allows issuers to publicly advertise their securities offerings, provided that all purchasers are verified as accredited investors and the issuer…
Quiz: Count the Securities Violations in this Statement
On June 24, 2025, the SEC issued a press release announcing a jury verdict against Thomas F. Casey for securities fraud. The jury found Casey liable for orchestrating a scheme that resulted in the loss of millions in retirement savings from more…
Highlights of the SEC’s 2025 Report on Regulation A (Reg A)
In May 2025, the U.S. Securities and Exchange Commission issued a report entitled “Analysis of the Regulation A Market: A Decade of Regulation A” by Angela Huang, an economist in the Commissions Division of Economic and Risk Analysis. This report…
Highlights of Regulation Crowdfunding Activity (2016–2024) from the SEC Division of Economic and Risk Analysis – May 2025
In May 2025, the U.S. Securities and Exchange Commission issued a report entitled “Analysis of Crowdfunding Under the JOBS Act” by Angela Huang and Vladimir Ivanov, economists in the Commissions Division of Economic and Risk Analysis. This report…
Common Rule 506(b) Integrationand Conversion Questionsfor Series LLC Syndicators
When raising capital under Rule 506(b) using a Series LLC structure, questions often arise about how many non-accredited investors are permitted across multiple Series, and whether the sponsor can continue forming new Series with non-accredited…
Do You Need Audited Financials?
A Guide for Syndicators and Fund Managers Offering Securities Under Rule 506(b) If you’re raising capital under Regulation D, Rule 506(b) of The Securities Act of 1933 (the Act) and plan to include non-accredited investors, you are subject to…
Why You Shouldn’t Receive Fees Based on Assets Under Management
Syndicators and Fund managers often wonder whether the way they are compensated can trigger regulatory obligations. A common method of compensation is based on a percentage of assets under management (AUM). This article explores whether AUM-based…
When is Investment Adviser Compliance Required for a Fund of Funds?
A fund of funds (FoF) manager might be able to avoid registering as an investment adviser, but it depends heavily on how the fund is structured, who is making the investment decisions, and which exemptions are being relied upon under federal and…
What is a Rolling Fund?
A rolling fund is a type of private investment vehicle that allows fund managers—often venture capitalists or syndicators—to raise capital on a recurring basis (typically quarterly), rather than through a single, one-time fundraise. This structure…
Avoiding Securities Advertising Pitfalls: A Legal Deep Dive for Syndicators and Fund Managers
What Returns Do Real Estate Investors Want in 2025?
Return expectations for real estate investors in today’s market depend on the investment type, location, and risk profile. Here’s a breakdown of what investors are generally targeting right now (in the second quarter, 2025), including key metrics…
Understanding DSTs vs TICs in 1031 Exchanges: Costs, Compliance, and Critical Rules
When it comes to structuring a 1031 exchange for real estate investors, two passive investment vehicles often come into play: the Delaware Statutory Trust (DST) and Tenants-in-Common (TIC). While both can qualify for 1031 exchange treatment under…
What is the Development Entitlement Process?
The land entitlement process refers to the legal and administrative steps required to gain the necessary approvals for land development. It is the process of securing the right to develop a property for a specific use, whether…
Testing the Waters: How to Gauge Interest for Your Regulation D Private Placement Offering
How to Gauge Interest for Your Regulation D Private Placement Offering Testing the waters (TTW) for a Regulation D offering involves gauging investor interest before formally launching the offering. Regulation D, which provides exemptions from SEC…
Want to Include Foreign Investors in a U.S. Securities Offering? What You Need to Know
Below are the issues you need to consider when including non-U.S. Persons in a U.S. securities offering: Securities Compliance First, you need to determine whether the investors are actually Non-U.S. Persons. For the purpose of U.S….
Can My Syndicate Use a 1031 Exchange to Swap One Syndicated Property for Another?
Yes, we’ve done this several times for our clients. This is a great strategy for the management team to increase its ownership in the new property. Here’s what you need to do: 1. First, you need to take a vote of your members. If a…
How to Allocate Earnings Within a Syndicate Management Entity
When creating a Real Estate Syndicate or Fund, you need to consider all of the jobs necessary to make the offering a success. You are starting a new company – and every new company has certain jobs that need to be filled. Initially, one or two…
506(b) Syndication or 506(c) Syndication – Which Is The Better Option for You?
We created this comprehensive guide to help you navigate the complexities of real estate syndication regulations. In this article, we will delve into the intricacies of Rule 506 offerings and explore the key differences between Rule 506(b)…
8 Things You Can Do if You Can’t Raise the Equity Needed to Close a Loan on a Deal You Currently Own
Can you loan your own IRA funds or borrow money to close a deal if you can’t raise enough from equity investors in time to close? Usually not. Most conventional and agency debt lenders won’t allow subordinate debt that remains in place after their…
Why You Need a PPM When Selling Securities
We often get asked if we can create an all-accredited offering with no Private Placement Memorandum (PPM). The answer is yes, but unless it’s going to include a very small group of investors whom you know extremely well, we don’t recommend it. You…
Am I obligated to tell investors about the risks of investing when I’m raising capital?
Yes, you are! First, y our obligation when selling securities is to provide the investors with all of the material facts they need to make informed consent. This has been interpreted to mean that you must tell prospective investors all the things…
What’s in a Securities Offering?
A private placement securities offering includes a number of documents, which collectively comprise the offering package. Each document has the specific purpose described below: The Private Placement Memorandum The private placement memorandum…
Six Reasons You Need a Separate Management Entity for a Syndicate or Fund
If you have a copy of Kim Lisa Taylor, Esq.’s Amazon best-selling book “How to Raise Capital Legally for Real Estate,” these topics are addressed on pages 176, 188-190, and Chapter 29 (How Cash Flows in a Syndicate or Fund). If you would like a…
Can I Present an Investment Opportunity to People I Don’t Know?
Before you start talking about specific deals, you need to decide which securities exemption you plan to follow. Rule 506(b) Those choosing Rule 506(b) can include an unlimited number of accredited investors and up to 35 non-accredited investors,…
How to Set Up a Hard Money Lending Fund
Here is a strategy to set up a hard money lending fund that borrows money from private investors and loans it to third parties or your affiliated companies.
Is Your Offering Viable?
How can you tell if your offering is viable? You must overcome two hurdles in order to have a viable offering: Is it legal? Is it marketable? Hurdle 1: Is Your Offering Legal? The first hurdle — “Is it legal” — is easily answered: If…
Can A Syndication Asset Manager Collect Asset Management Fees from TIC Owners?
NOTE: This article is the second in a 2-part series on 1031 Exchanges and Syndicates using the tenant in common ownership structure for acquisition of commercial real estate. This article describes how asset management fees can be allocated among…
Can 1031 Exchangers Participate in a Group Investment With a Syndicate?
NOTE: This article is the first of a 2-part series on 1031 Exchanges and Syndicates using the tenant in common ownership structure for acquisition of commercial real estate. This article describes how 1031 Exchangers can participate in a group…
The Perils of Drafting Your Own Real Estate Syndication Documents
What are the perils of drafting your own real estate syndication documents? Improper Structure/Loss of Syndicator Compensation A competent securities attorney will help you structure your offering with respect to how you and your investors get…
Don’t Blow Your Securities Exemption!
Federal and State Notice Filing Requirements NOTE: This article specifically pertains federal and state-required filings for exempt securities offerings under Regulation D, Rule 506. This information is not applicable securities offerings under…
Want to Help Your Friends Invest? Consider Opening an Investment Club
You know the benefits of wise investing, but what about your friends? One way to introduce them to investing and help educate them is through an investment club. What exactly is involved in overseeing an investment club? As the foundation, you…
Why Your Single-Member LLC Should be Formed in Wyoming
Need to form a single member LLC and also want liability protection? Wyoming may be your best choice. Here’s why: A Charging Order is the sole remedy that a creditor has against a Wyoming LLC. This means a creditor can attach the distributions of…
Fund of Funds Checklist
Have investors but don’t have a deal? This structure is useful for people who know investors but either don’t have deals or want to invest in others’ deals. Here’s a checklist for a “Fund of Funds.” Sponsor Sets up Their Own Fund: Uses U.S. or…
What Can Happen if You Don’t Comply with Securities Laws?
The importance of complying with Securities Laws can never be emphasized enough. Securities regulators, including both the Securities and Exchange Commission (SEC) and state securities agencies, routinely conduct securities investigations into…
Should You Really Start a Fund?
We get potential clients who reach out to us every week who want to start a fund. While we could simply take their money and set them up with fund offering documents, we actually talk a lot of people out of doing a fund. Why? Because they don’t…
What to do When Disaster Strikes Your Syndicated Property
Disasters at income properties come in many forms. Over our years of practice, our clients have had fires, major wind damage, hurricane flooding, COVID, partner embezzlement, and even murder. When disaster strikes, you need a plan for dealing with…
SEC Updates & Multi-Family Syndication Trends
In our December 2020 free educational webinar, attorney Kim Lisa Taylor provided details of recent SEC actions and proposals that have positive implications for capital raisers. Unfortunately, we encountered technical difficulties with the…
SEC Proposes Harmonization Amendments to Exempt Offerings
While everyone else has been hunkered down over the past few months, the SEC staff has been busy proposing and adopting new regulations, some of which may have a significant positive impact on raising private money. Among them are Harmonization…
Debt vs. Equity Offerings
Finding it difficult or confusing to understand the difference between debt and equity financing? Simply stated, debt securities are loans that pay out interest over time, while equity securities confer ownership in a company (think about this in…
Court Ruling Spotlights ‘Cryptocurrency as Securities’ Question
A 2020 court ruling is providing more clarity to the question of when digital assets are subject to securities laws and serves as notice to issuers and investors alike of increased enforcement efforts by the SEC in cryptocurrency cases. U.S….
SEC Issues Final Amendments to Definition of Accredited Investor — But Will it Help You?
The expanded definition of an Accredited Investor [1] finalized by the Securities & Exchange Commission on Aug. 26, 2020, may sound encouraging, but will it really be all that helpful for Syndicators raising money from private individuals…
What to Know About Preferred Equity
What is Preferred Equity? In the context of this article, Preferred Equity simply means a particular investor who will receive different or priority returns than other investors. Preferred Equity typically comes from Family Offices, Insurance…
Avoiding Fraud in Syndication
Syndicators Beware — Your Livelihood and Reputation are On the Line if Fraud Occurs in Your Syndicate Fraud is a constant risk in any kind of transaction but even more so in a real estate syndication, which involves pooling funds from multiple…
3 Reasons NOT to Do a Joint Venture with Investors When Raising Capital
The following question was recently asked of our firm: “If I’m raising less than $1 million, do I still have to follow securities laws? Can’t I just do a joint venture?” The amount of money you are raising doesn’t matter. What determines whether…
How and Where a Syndicator Can Network for Investors
Meeting—and then developing meaningful relationships with—investors is key to your success in real estate syndication. Here is insight on how to accomplish that. Regularly Attend Local Events Sam Freshman, author of the book, “Principles of Real…
Navigating Private Lending Laws
Question: What laws apply if you are raising funds from private lenders to: a) fund your real estate investing or private lending business, or b) if you are loaning their funds to others? When Securities Laws Apply If you are borrowing or pooling…
Opportunity Zones for Syndicators
By now many taxpayers have heard about Opportunity Zones enacted under the Tax Cuts and Jobs Act 2017. As a quick recap, the objective of Opportunity Zones is to spur economic growth in underserved areas by providing tax incentives to investors in…
What is a Sources and Uses Statement in a Private Placement Memorandum?
One of the essential elements for any Private Placement Memorandum (PPM) is the Sources and Uses Statement. This is required PPM content by the Securities and Exchange Commission and is good business practice for any startup or ongoing business….
How to Get More Investors for Your Syndicate
Deciding on an idea for your startup company or real estate deal is just the first step of many on your way to success. In this white paper, we’ll focus on one of the most important steps: Identifying and using the tools you need to market yourself…
Crowdfunding: A Guide to the Basics
CROWDFUNDING YOUR OFFERING What is Crowdfunding? Crowdfunding is simply a method of legally advertising a securities offering via the Internet or other means. The JOBS Act included provisions (Titles II, III and IV) that allow direct advertising of…
Qualified Opportunity Funds – Coming to a Community Near You
This Will Change the Way You Think About Exchanging Property! On Oct. 19, 2018, the U.S. Department of Treasury and the Internal Revenue Service (IRS) jointly issued proposed guidance related to a new Opportunity Zone tax incentive to be applied…
The 1031 Dilemma – Tenants in Common, Delaware Statutory Trusts & Syndicates
We often get calls from clients who ask the question: “Can I include a 1031 investor in a syndicate?” The sad truth is that syndication and 1031 investors don’t mix well. Before we begin our discussion, just what is a 1031 Exchange? According to…
Don’t Blow Your Exemption! SEC Form D Filings and Blue Sky Filing Requirements for Reg D Offerings
QUESTION: What notices must be filed with securities agencies for an exempt real estate syndication under Regulation D, Rule 506? The following answer is involved, but well worth your time and attention to keep you out of trouble where the sales of…
What You Should Know Before Investing in a Syndication
Before accepting any investor funds, the sponsor of a syndication is required by securities laws to provide a set of offering documents that explains the terms and discloses the risks of the offering to prospective investors. Here are 10 things to…
How to Write an Investment Summary for a Blind Pool Securities Offering
Sending an investment summary to investors will be considered the first step in making an offer, so if you are doing a Regulation D, Rule 506(b) offering, you should only send it to people with whom you have established a pre-existing relationship….
Regulation S Real Estate Syndication Offerings Solely to Foreign Investors
QUESTION: What are the rules regarding using foreign investors in a real estate syndication that is buying property in the United States? A. Applicable Securities Laws Regulation S and Rule 144—The applicable laws are found in U.S. Securities and…
10 Things Investors Should Know Before Investing in a Real Estate Syndication
If you have a self-directed IRA or substantial investment funds, you no doubt have considered investing in real estate. However, you may lack the funds to invest on your own or the desire to deal with the hassles of property management. A viable…
HUD Loans For Construction, Rehab & Refinancing
Little-known to most real estate investors, the Federal Housing Association (FHA), in conjunction with the U.S. Department of Housing and Urban Development (HUD), collectively offer mortgage insurance programs for both apartments and health care…
To Be Accredited, or Not to Be Accredited
Why Does it Matter and How Does One Get Verified as Accredited? When must investors in a syndication deal be Accredited, and when can Non-Accredited Investors participate in the opportunity? Sometimes the answer is not clear-cut, which is why it’s…
What is the Right Entity for You?
As an owner or potential owner of investment real estate, you may have been warned not to take title to real estate in your own name. The reason is to protect your personal assets outside the entity from liability in the event of a lawsuit against…
Fiduciary Duties & Other Obligations to Investors in a Securities Offering
If you are selling securities via a private placement or public offering of securities to private investors, you have certain obligations and duties to your investors. Failure to heed them could result in lawsuits, civil fines and, in the worst…
Is Your Corporate Veil Puncture-Proof?
If you own a corporation, you no doubt formed it because you wanted to protect your personal assets from any liability arising from your business activities. In other words, you wanted to take advantage of the infamous “corporate veil.” What is the…