Articles from Our Library

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 surely anyone could...

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Determining Investor Suitability for 506(b) Offerings

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 document attesting to...

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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 above scenario, you...

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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 facilities (such as...

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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 always a good idea...

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Splitting Money With Investors in a Syndication

There are a number of ways to split money with investors in a syndication. Real estate syndicators commonly use a couple: a straight-split scenario, or a preferred return scenario. 2 Ways to Split Money With Investors Let’s take a closer look at these two ways to...

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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), in a Regulation D,...

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12 Ways You Can Earn Money as a Real Estate Syndicator

A question I often encounter is how one can make money at real estate syndication. Let’s start by addressing what we mean by real estate “syndication.” A real estate syndication is a means for a group of passive investors, organized by a “syndicator” or “sponsor,” to...

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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 you, or in case...

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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 Corporate Veil? The...

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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 research before...

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Dangers of DIY Real Estate Syndication

Suppose you’ve found a smoking-hot real estate investment opportunity but you don’t have the necessary funds outright? Don’t procrastinate; syndicate! But by all means, make sure you use professional help – because do-it-yourself (DIY) syndication can be more...

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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 a specific set of...

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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 money in a common...

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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 (PPM) essentially “tells...

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506(b) or 506(c) – That is the Question

First there was Rule 506, under which investors could claim exemption to the requirement of registering securities. Subsequently, in its July 10, 2013, meeting, the U.S. Securities and Exchange Commission (SEC) adopted the new Regulation D, Rule 506(c), authorized by...

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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 hassles of property...

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