Articles from Our Library
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 independent contractor to...
read moreWhat 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...
read moreWhat’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...
read moreHow 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...
read moreJoint 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...
read more506(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...
read moreReal 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 loan documents and all...
read morePaying 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,...
read more10 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, etc.). 2 - Obtain...
read more10 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 estate syndicator, what...
read moreHow to Get More Investors for Your Startup
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 to potential...
read moreCrowdfunding: 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 securities on the...
read moreUnderstanding the Basics of Crowdfunding
What is Crowdfunding? Crowdfunding is simply a means to legally advertise a securities offering via the Internet or other means. The JOBS Act has provisions (Titles II, III and IV) that allow direct advertising of securities on the Internet by private issuers, without...
read moreQualified 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 nationwide. The tax...
read moreJoint Ventures & Co-Investments — Typical Structures & Applications
What is a joint venture? Two or more parties who join together to achieve a common goal. In this article we will focus on some typical joint venture structures and how they can be used in companies that raise money from private investors. For a more detailed look at...
read moreThe 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 the United States...
read moreDetermining 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...
read moreSpecified, Semi-Specified, Segregated or Blind Pool — Which Offering Type is Right for You?
NOTE: This article pertains to Private Placement Securities Offerings. The information provided is for educational purposes only and is not to be relied upon as specific legal advice. You should consult a securities attorney before deciding which of the following...
read moreSEC Form D Filings and Blue Sky Laws for Rule 506 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 securities is...
read moreSoliciting Investors for a Rule 506(b) Private Placement Offering
QUESTION: How can I solicit investors for a group real estate investment? A securities offering claiming the “private placement” exemption from registration under Regulation D, Rule 506(b)—“Rule 506(b)”—per Section 4(2) of the Securities Act of 1933 is generally a...
read moreSplitting 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. There Are Many Ways to Split Money With Investors Let’s take a closer look at two...
read more12 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...
read moreWhat 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...
read moreDangers 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...
read moreHow 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. Planning Your...
read moreThe 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 “Sponsors” or...
read moreRegulation 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 Exchange Commission...
read moreDon’t Blow Your Rule 506(b) Exemption Before You Raise a Dime
Recently, I received an email inviting Accredited and Non-Accredited Investors to attend a free webinar regarding a property that was being syndicated. Presumably, this was for a Rule 506(b) exempt offering that allows unlimited accredited investors and up to 35...
read more10 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 option for you may be...
read moreYou 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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