Frequently Asked Questions
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How Do I Split Money With Investors?
How Do I Split Money With Investors? There is no “right” answer on how to split money with investors. The answer depends on the deal. In your early deals, your friends and family who believe in you and what you're doing are your most likely...
What Might Happen if I Lie About My Financial Qualifications to Get Into a Deal?
What Might Happen if I Lie About My Financial Qualifications to Get Into a Deal? Some securities exemptions like Regulation D, Rule 506(b) (and certain state securities exemptions) allow limited investments from non-accredited but financially...
How to Abandon an Offering
Here are the things you should do to abandon an offering that has no assets and no members: Hold a meeting of members of the Asset Management Entity (if applicable); Take meeting minutes and a vote to abandon the offering; create a resolution to...
What Happens if I Want to Leave My Unreimbursed Pre-Closing Expenses or Acquisition Fees in a Deal?
A member of a syndication asset management entity can convert all or part of their uncollected management fees (such as the acquisition fee), or any other reimbursements that were owed on acquisition of the property, into investor membership...
Is a Deal That Has a 10% Overall Return Viable for Private Investors?
If the overall cash-on-cash return for this project is only 10%, it's not a viable deal. Investors generally want annualized returns from a combination of cash flow and equity on sale in the mid-to-high teens, and if they perceive it as a risky...
Do I Need a License to Raise Money for Somebody Else’s Deal?
Short answer: Yes, but you can co-GP as long as you follow some defensible guidelines: To defend a charge of acting as an unlicensed broker, you have to be able to prove you had an active role in management other than raising money,...
How Do I Calculate Annualized Returns for Investors on Sale of a Property?
To calculate annualized returns for investors on the sale of a property, follow these steps: Formula: Annualized Cash-on-Cash Return = (Total Distributions divided by Capital Contributions) divided by the number of years the property was...
How to Review a Balance Sheet and Income Statement
When considering any investment opportunity, you should perform due diligence not only on the deal being offered but the entity sponsoring the deal. An important aspect of that is to examine the entity’s financial records. Two of the main ones are:...
Is it True That Most Syndicators Have Less Than 3 Years’ Experience?
We were recently asked: “Some LinkedIn posts suggest that 70% of syndicators have less than 3 years’ experience; is this true? “ I haven't analyzed the data, but it wouldn't surprise me if this is correct. There are MANY real estate trainers...
Does a Syndicator Have to Keep Investors Informed if Something Changes Post-Closing?
If this is a securities offering (with passive investors contributing funds), then the "issuer" of the securities has an obligation to inform prospective investors of all material facts necessary to make informed consent prior to making their...
Is it Ok to Continue to Raise Money After Closing a Syndicated Deal?
When we create a syndicate for our clients, we always set a minimum and maximum amount of the offering. The target raise should be somewhere in the middle of the minimum and maximum. The minimum is just what's needed to close the deal; the maximum...
What Should I Do to Wind Up a Syndicate After the Sale of the Property?
If there’s enough money from the sale after paying off the loan, go ahead and pay back your investors’ original capital contributions. Make sure to withhold enough to pay any outstanding liabilities (tax returns, property tax bills, outstanding...
Where Should We Send Investor Contributions in a Joint Venture or a Syndicate?
The answer is the same, regardless of whether you are collecting funds for a syndicate or joint venture: Do not ever send individual investor funds to a property escrow or closing account or to an attorney’s trust account. Property escrow accounts...
Can I Collect Funds From Investors Before the Offering Documents are Complete?
Here are a couple of options: 1. You can create a “Securities Escrow Account” in the Company name where Investor funds are collected based on a preliminary Subscription Agreement. The funds would not be released to the Company until the...
Do Non-U.S. Investors Have to be Accredited to Invest in a Rule 506(c) Offering?
There is a separate exemption — Regulation S — for Non-U.S. Persons. The rule for Reg S says there are no financial qualifications for Non-U.S. Persons who invest in a U.S. Offering under Regulation S. However, the industry standard is: If...
Should I Start an Internet Marketing Program to Attract Investors? Is There Someone Who Can Help Me Do This?
Here’s the thing: Building relationships on the internet is expensive ($5k-$10k/month). We spend thousands of dollars every month on marketing/SEO/professional editors/graphic designers/social media consultants, and 5-10 hours of my...
What Happens if I Don’t Dissolve My LLCs?
If you want to raise capital and be a syndicator, you have a fiduciary obligation to your investors to properly form, operate and dissolve the companies you create in connection with your offerings. The proper way to terminate a company is to file...
How Do I Determine Investor Splits?
Start by answering this question: What is the overall average annualized cash-on-cash return (AAR) for the project? If you don’t know how to calculate this, please follow the steps below. If you don’t want to do this yourself, there are plenty of...
How Do I Calculate ‘Annualized Returns’ for Investors?
Annualized returns are calculated by adding up “distributable cash” both from cash flow during the operation of your investment property and “equity” realized on eventual resale. Distributable cash from operations is the cash remaining after paying...
How Should I Structure the Entities for a Development Project?
For development projects (or possible development projects), we recommend using 3 LLCs as follows: A single-purpose venture/title-holding entity (SPV) — This LLC will hold title to the property and will become the borrower for any subsequent...
Can I Accept IRA Funds From Investors in My Syndicate or Fund?
There are no restrictions on accepting IRA funds for purchasing directly owned real estate, allowing you to raise up to 100% of your funds from pension funds. However, if you invest in non-real estate assets or securities in others' real estate...
What is a Minimum/Maximum Raise?
The minimum is the absolute minimum amount a syndicator can raise from investors and still be able to close, meaning you are not collecting an acquisition fee or getting reimbursed for pre-closing expenses, and may not have all the capital...
Reaffirming an Investor’s Accreditation
Question: Can an investor that invested with us before in a Rule 506 Offering complete a re-affirmation letter in lieu of getting re-verified as an accredited investor if they want to invest in our current Rule 506(c) Offering? Answer: Investors...
Can I Convert a Rule 506(b) Offering to a Rule 506(c) Offering, and Vice Versa?
Yes, you can. There's no waiting period if you convert from a 506(b) to a 506(c) offering. But if you convert from a 506(c) to a 506(b), you will have to stop raising money for the 506(c) offering for at least 30 days before you can start...
How do I Invest in a Rule 506(c) Offering?
Want to invest in a Rule 506(c) offering? Here is what you must do: In order to claim the Rule 506(c) exemption, the issuer of the securities you want to purchase must be able to demonstrate they took “reasonable steps” to ensure that all...
What Name Should I Use to Present a Purchase & Sale Agreement to a Seller of Commercial Property If I Haven’t Created an Entity Yet?
You can use your branded entity to make offers via a Letter of Intent (LOI). When your LOI is accepted, you create the Purchase & Sale Agreement (PSA). The buyer listed on the PSA is “your branded entity and/or assignees.” You won’t create an...
What Entity Should I Use to Make Offers on Real Estate?
You should create a “Brand LLC” that you will use to make offers. It will either be used as the Manager LLC of a syndicate or it may be used as your representative member in the management of a syndicate if there are other management team members...
Can I Use the Same Entity to be the Manager of Multiple Syndicates?
You can use the same Manager LLC for multiple syndicates as long as you don’t change members of the management team for specific deals. If you do, you will need a new Manager LLC for each syndicate. Your Manager LLC should never own...
Can My Real Estate Fund Hire Employees?
Typically, a Fund operating agreement does not contemplate or authorize the direct hiring of employees. It can be a mistake for an entity that has investors to hire employees, as you start mixing up liabilities (investor liabilities and employee...
We Sold a Property; How and When Should We Dissolve Our Entities (LLCs)?
Generally, the Manager should dissolve all entities once the property is sold and all affairs wound up. You’ll need to review each of your operating agreements to see if a vote of the members is required before you do so. If it is, you’ll have to...
How Long Do I Need to Syndicate a Property?
Timing of a deal is a balancing act. You can’t wait until you have completed all of your due diligence before you engage your securities attorney — or you won’t have enough time to raise the money. Once you engage us, we will schedule a...
When should a Syndicator contact Syndication Attorneys?
Before you Have a Deal Many clients contact us before they find a deal. We have a Pre-Syndication Retainer for this that allows them to become clients of the firm for a nominal retainer. Under this agreement, we can help guide Syndicators from...
Beware of Single-Check Writers
Single-check writers are people who say they can fund your whole deal. They are usually private equity companies, hedge funds, family offices or high net worth individuals. Single-check writers have a habit of: 1. Going dark right...
How Does a Business Entity or Trust Qualify as an Accredited Investor
To be accredited, the entity or Trust has to meet one of the following conditions: ≥$5M in Assets, or Each of the beneficial owners must be accredited. For Trusts To invest in a Rule 506(c) Offering that only allows verified Accredited...
What’s the Difference Between an Asset Manager and a Property Manager?
An Asset Manager’s primary job is to manage a company and its properties on behalf of the company’s owners. The owners include the investors who contributed the money to acquire, improve and operate the company’s assets, as well as members of the...
How to Choose a Name for Your Branded Company
Before you get too invested in your favorite name for your new company, here’s what you need to do: Do a Google search to see who else is using it or something very close to it; If that’s clear, do a domain search at GoDaddy to see if...
What is a ‘Sophisticated Investor’?
To be “sophisticated,” the Investor must have, under Rule 506(b)(2)(ii), “either alone or with his purchaser representative(s) such knowledge and experience in financial and business matters that he is capable of evaluating the merits and...
Can I Accept an Investor Who is Referred By a Friend in my Regulation D, Rule 506(b) Offering?
You need to determine every investor’s “suitability” to invest before you offer them the investment opportunity, regardless of how they were referred, as that begins the “substantive relationship.” See the article “How do I Create a Substantive...
Why Can’t Investors Self-Certify That They are Accredited for a Rule 506(c) Offering?
The short answer is, “Because the SEC says so.”. Here’s why: The SEC stated in the rules authorizing Rule 506(c) that the issuer must have a “reasonable assurance” that all investors are accredited, and that information has been “verified”...
How Should You Carve up Management Earnings in a Syndicate?
Here’s how we suggest people carve up ownership in the management of a syndicate (and seems to be consistent with what we see our clients doing). As a default, this would apply to allocation of Manager’s fees and to Class B (profit) Distributions,...
Can I Show Past Deals To Prospective Investors?
This is a common question we hear in the real estate securities law industry so we wanted to answer it here. Until you have established a substantive relationship, you cannot show past deals if you are doing Rule 506(b) Offerings, as the SEC...
What if I have a Rule 506(c) offering, but want to admit a self-directed IRA Investor who is not accredited?
What if I have a Rule 506(c) offering, but want to admit a self-directed IRA Investor who is not accredited? You can’t allow this investor to purchase Interests in your company under a Rule 506(c) offering. The only way you can admit a financially...
Can I just put 10 close friends and family in an LLC to buy real estate without following securities laws?
Can I just put 10 close friends and family in an LLC to buy real estate without following securities laws? NO. Ten people is too many to put in one LLC and maintain a legally defensible joint venture, as there aren’t enough jobs to ensure that...
Why Can’t I Get Compensated for Selling Securities for Others?
Why Can’t I Get Compensated for Selling Securities for Others? You can, but you must have a license to do it. Just like a real estate broker is required to have a license to get a commission for selling someone else’s house, you need a license to...
What’s a Good CRM for Raising Capital?
What's a Good CRM for Raising Capital? We started out with Insightly (a Google app); we now use Active Campaign. Insightly is a good starter, as it used to be free for two people. We upgraded to Active Campaign when we wanted to start a newsletter...
What’s a Convertible Promissory Note Offering?
What’s a Convertible Promissory Note Offering? A Convertible Promissory Note Offering allows you to raise money in advance of having a deal under contract or within a short timeframe. With a Convertible Promissory Note Offering, you can offer note...
Can We Use Our Individual Entities to Co-Manage a Real Estate Syndicate?
Can We Use Our Individual Entities to Co-Manage a Real Estate Syndicate? We recommend that you use a single-Manager entity to manage a syndicate.The individual entities owned by members of the management team can be members of the Manager entity,...
Do You Provide Securities Offering Document Templates?
Do You Provide Securities Offering Document Templates? We don’t offer document templates. We provide reasonable, lump-sum fees for drafting our clients’ securities offering documents and helping them properly structure their companies, and we have...
What’s the Difference Between a Cumulative Preferred Return and a Compounding Preferred Return?
What’s the Difference Between a Cumulative Preferred Return and a Compounding Preferred Return? “Cumulative” means carried over annually from year to year. “Compounding” means the unpaid balance is added to the principal and it, too, accrues the...
Can I Use a Simple Compensation Agreement to Raise Money for Other People?
Can I Use a Simple Compensation Agreement to Raise Money for Other People? You can’t use an agreement to get compensated for raising money for others unless:a) You have a securities broker-dealer license (not a real estate broker’s license) orb)...
What do You Have to do to Verify Repeat Investors for Rule 506(c) Offerings?
What do You Have to do to Verify Repeat Investors for Rule 506(c) Offerings? In the SEC’s publication Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets[1], the SEC relaxed the...
Do I Need a PPM?
Do I Need a PPM? Recently, we were asked: "I know someone who does deals with the same group of investors over and over and just uses a limited partnership agreement without a subscription agreement, PPM, or securities notice filings. Can I do...
Can a Canadian Citizen Invest in My Syndicate?
Can a Canadian Citizen Invest in My Syndicate? Yes, but if your investment entity is a limited liability company, they could be double-taxed in the United States and Canada unless they have their own C Corp or Limited Partnership that makes the...
When Can I Talk Deal Points With Investors?
It depends whether you are doing a Rule 506(b) Offering, and if so, you must establish a pre-existing, substantive relationship before discussing specific deal points (which constitutes making an offer) with them. I suggest you read the article in...
Can I Offer Different Terms to Different Investors?
Can I Offer Different Terms to Different Investors? The two primary reasons to do this are to reward specific investors for investing more than others or investing early.There are two ways you can do this:SUBCLASSES - You can create one or more...
When Do I Need to Worry About Doing a Securities Offering if I am Borrowing Money from Private Investors?
When Do I Need to Worry About Doing a Securities Offering if I am Borrowing Money from Private Investors? If you are just doing a one-off loan, you don't need to be overly concerned about Rule 506(b) — especially if your investor is accredited....
When Does Selling Interests in an LLC Constitute the Sale of Securities?
When Does Selling Interests in an LLC Constitute the Sale of Securities? We see many people try to avoid securities laws by saying they are doing “joint ventures” when, in reality, they are selling securities. Selling interests in a Manager-managed...
What Do I Need to Know About Syndicating in the Wake of the Coronavirus Pandemic?
What Do I Need to Know About Syndicating in the Wake of the Coronavirus Pandemic? The syndication market has slowed. Proceed with caution.Give yourself long escrows and extra extensions on any new projects right now, as investors are slow to act...
Can I Raise Capital Through Regulation D, Rule 506 for an Opportunity Zone Project?
Can I Raise Capital Through Regulation D, Rule 506 for an Opportunity Zone Project? You can raise money for an Opportunity Zone project under the Regulation D, Rule 506 securities exemption the same as you can for any other securities offering. You...
How Do We Delegate Responsibilities Among the Management Team of a Syndicate?
How Do We Delegate Responsibilities Among the Management Team of a Syndicate? First, you need to think about the organization structure within your company.You should list all of the responsibilities associated with your project and then delegate...
What if the Terms of Our Deal Change After We Have Already Shown it to Investors and Some Have Invested?
What if the Terms of Our Deal Change After We Have Already Shown it to Investors and Some Have Invested? You are required to provide investors with all material facts that would affect their decision to invest with you. If you have changed the...
How Do I Satisfy the Lender’s Requirement That I Provide 20% of the Needed Funds for a Development Project?
How Do I Satisfy the Lender’s Requirement That I Provide 20% of the Needed Funds for a Development Project? This is the typical syndication model. If you don't have your own funds to cover the balance between the construction loan and the funds...
Where do I file Blue Sky Notices if An Investor Invests Through an LLC?
Where do I file Blue Sky Notices if An Investor Invests Through an LLC? If an Investor is using an LLC to make their investment, you would use the state of LLC formation as the state of residence instead of where they physically reside. As far as...
How Should a Syndicate Manager Take Title to its Carried Interest?
Q. My syndicate is structured with 2 classes of Members. Class A is for cash-paying investors. Class B is reserved for management. If I am participating in management and earning Class B interests, how should I take title to them? A. There are tax...
Is This Ad Legal?
Is This Ad Legal? An advertisement containing the following language was forwarded to me, with the question, “Is this ad legal?”12+% AVERAGE CASHFLOW!!82+% 5-YEARINVESTOR RETURN!!The ad went on to show photos of a multifamily property, discussing...
Is a ‘Prequalification Questionnaire’ all I need to have completed by an investor before I can ask them to invest in my Rule 506(b) Offering?
Is a ‘Prequalification Questionnaire’ all I need to have completed by an investor before I can ask them to invest in my Rule 506(b) Offering? Most of our clients start out doing Regulation D, Rule 506(b) Offerings that allow them to bring in an...
Can A Syndicator Use SCOR And Rule 147 To Allow Non-Accredited Investors To Invest In A Deal?
Can A Syndicator Use SCOR And Rule 147 To Allow Non-Accredited Investors To Invest In A Deal? Rule 147 is a federal rule that basically says that as long as you, all investors and usually 80% of the assets owned by the company are all contained...
Are All Group Investments Syndicates That Require Compliance With Securities Laws?
Are All Group Investments Syndicates That Require Compliance With Securities Laws? There is a distinction between a joint venture, where all members are responsible for generating their own profits and where securities compliance is not required,...
Where Can I Meet Syndicators Who Allow Unaccredited Investors?
Where Can I Meet Syndicators Who Allow Unaccredited Investors? Go to as many networking and “guru” events as possible where people are learning to buy the same thing you want to buy. For instance, if you want to invest in multifamily, find...
How Can I Develop A Relationship With a Syndicator So That I Can Invest With Them As An Unaccredited Investor?
How Can I Develop A Relationship With a Syndicator So That I Can Invest With Them As An Unaccredited Investor? Technically, the relationship begins when the syndicator knows enough about you to know whether you are accredited, or unaccredited but...
What to do if You Want to Invest in a Rule 506(c) Offering?
What to do if You Want to Invest in a Rule 506(c) Offering? In order to claim the Rule 506(c) exemption, the issuer of the securities you want to purchase must be able to demonstrate that it took “reasonable steps” to ensure that all investors...
How Can I Establish a Relationship With Investors to Invest in my Deals?
How Can I Establish a Relationship With Investors to Invest in my Deals? Generally, you can say you are planning to form some group investments for future multifamily acquisitions and would like to get to know others who might be interested in...
How Should I Structure a Small Multifamily Deal With Investors?
How Should I Structure a Small Multifamily Deal With Investors? There are lots of ways you can structure a small deal with investors. Some are cumbersome: Full-blown securities offering with Private Placement Memorandum, Operating Agreement,...
Should I Become an ‘Accredited’ Investor?
Should I Become an ‘Accredited’ Investor? Newbie investors who encounter opportunities that are open only to Accredited Investors sometimes wonder, “Should I become an Accredited Investor?”The fact of the matter is that “Accredited” is not...
Are Rule 506 Offerings Exempt from Blue Sky Laws?
Are Rule 506 Offerings Exempt from Blue Sky Laws? Rule 506 offerings are exempt from further regulation at the state level, except that issuers must:Be able to demonstrate to state regulators how they followed the applicable 506 rules,Not pay any...
How Long Does it Take to Set up a Real Estate Syndication?
How Long Does it Take to Set up a Real Estate Syndication? For a specified Offering, you should plan on 3-4 weeks from the time you engage us to the time you receive your completed documents.For a blind pool Offering, you should plan on 3-4 weeks...
How Does Cash Flow in a Syndicate?
How Does Cash Flow in a Syndicate? Here is how cash flows in a Syndicate (as drafted by Syndication Attorneys):On acquisition Investor funds are collected in the Investor LLC Operating Account.When it is time to close on the Property, the Manager...
How Do I Split Money With Investors?
How Do I Split Money With Investors? There is no “right” answer on how to split money with investors. The answer depends on the deal. In your early deals, your friends and family who believe in you and what you're doing are your most likely...
What Might Happen if I Lie About My Financial Qualifications to Get Into a Deal?
What Might Happen if I Lie About My Financial Qualifications to Get Into a Deal? Some securities exemptions like Regulation D, Rule 506(b) (and certain state securities exemptions) allow limited investments from non-accredited but financially...
Can I Still Invest in a Securities Offering if I am Not Accredited?
For most securities offerings that allow unaccredited investors, you must have a pre-existing relationship with the “issuer” (syndicator) before it can offer you an investment opportunity. Your best option if you don’t meet the accredited...
How to Write a Winning Biography
How Can I Write a Personal Biography for my Investment Company that Inspires Confidence in my Investors? This isn’t a resume, so do this in paragraph format (not bullets). It doesn’t have to be long, just two to three paragraphs at most.Here are...
How Do I Structure a Small Deal With Investors?
How Do I Structure a Small Deal With Investors? From a securities legal standpoint, you could do a joint venture (JV) or member-managed LLC, where the investors are actively involved and stay in control of their own money, if you don’t want to have...
Can I Include in My Syndication an Investor Who Wants to do a 1031 Exchange?
Can I Include in My Syndication an Investor Who Wants to do a 1031 Exchange? No, an investor who wants to do a 1031 exchange cannot take partial ownership interests in a company that takes title to real estate (the typical syndicate structure)....
What are the Rules Regarding 506(b) Solicitation and Mass Communication?
What are the Rules Regarding 506(b) Solicitation and Mass Communication? A reader writes:“I am a member of a group of several hundred people who are interested in investing in commercial real estate. Many of them are not Accredited so I want to do...
What Should be Included on a Business Card You Use for a Real Estate Investment Company?
What Should be Included on a Business Card You Use for a Real Estate Investment Company? If your company is an LLC, your cards need to say “LLC” after the company name, either in the logo or elsewhere on the card.Also, you should consider using a...
What is the Difference Between Rules 506(b) and 506(c)?
What is the Difference Between Rules 506(b) and 506(c)? Often, in social forum discussions concerning offerings under Rules 506(b) and 506(c) you only find good partial explanations. Here are the complete rules: 506(b) allows you to raise an...
Can I Just Borrow Money From My Family And Friends Without Having To Comply With Securities Laws?
Can I Just Borrow Money From My Family And Friends Without Having To Comply With Securities Laws? Be sure you consider the securities implications of obtaining money from family and friends for your syndication deals. Promissory notes are...
Is There a General Format or Template for Soliciting Investors?
Is There a General Format or Template for Soliciting Investors? The following is a blueprint for soliciting investors for a Rule 506(b) offering, but it will increase your fund-raising effectiveness if you use it for all securities offerings.a)...
Where Do You Meet Syndicators Who Do 506(b) Offerings that Allow Sophisticated Investors in Their Deals?
Where Do You Meet Syndicators Who Do 506(b) Offerings that Allow Sophisticated Investors in Their Deals? The best place to meet them is at educational events that attract a lot of people and network with the people there who are doing deals — such...
How Can You Set Yourself Up for Success In Syndication?
How Can You Set Yourself Up for Success In Syndication? The best way to set yourself up for success in syndication is to have a ready source of potential investors so that when you have a deal, you have investors to call.You do this by developing a...
Is “Managing Partner” the Right Title for Me to Use in my LLC?
Is “Managing Partner” the Right Title for Me to Use in my LLC? NO! Doing so will advertise your lack of knowledge about corporate structures to the world. While many of your peers may be equally uninformed (since they are all using that title and...
5 Steps To Choosing Your Branded Company Name
5 Steps To Choosing Your Branded Company Name Do a Google search to see if anyone is already using the name or something similar.Check GoDaddy or another domain provider to see if the domain is available.If both of those fly, then check the...
Why Shouldn’t I Look for Big Investors Instead of a Bunch of Smaller Investors?
Why Shouldn’t I Look for Big Investors Instead of a Bunch of Smaller Investors? Whale Investors Can Krill Your Offering…Waiting for large investors (I call them “Whale Investors”) to fund your offering is a certain way to doom it to failure. Whale...
What is a Consent Resolution?
What is a Consent Resolution? A consent resolution is a specific document giving you authorization from the members/managers of each of your companies to proceed with the purchase and the loan and designating one or more of the members of the...
What’s a Subscription Agreement?
What’s a Subscription Agreement? A Subscription Agreement is a legal document in a securities offering package that contains an investor’s representation and warrantees that they meet the financial qualifications to invest, understand the risks,...
Should I Only Include Accredited Investors in My Deals?
Should I Only Include Accredited Investors in My Deals? Some people say “yes,” but honestly, my clients usually don’t start looking for new accredited investors until they have tapped out their group of family and friends who aren’t accredited. You...
How Can I Incorporate Seller Financing in a Multifamily Purchase that has a Loan with Fannie Mae or Freddie Mac Financing?
How Can I Incorporate Seller Financing in a Multifamily Purchase that has a Loan with Fannie Mae or Freddie Mac Financing? Fannie Mae and Freddie Mac (and many commercial loans) don’t currently allow subordinate debt. You can thank the Great...
If I Offer My Investors a Fixed Return on a Commercial Property, Can I Avoid Having to Comply with Securities Laws?
If I Offer My Investors a Fixed Return on a Commercial Property, Can I Avoid Having to Comply with Securities Laws? If this deal is financed by a lender, they will want to know the source of your down payment and closing costs. Fannie Mae, Freddie...
When Should I Form an LLC to Take Title to a Property I am Syndicating?
When Should I Form an LLC to Take Title to a Property I am Syndicating? We suggest that formation of the entity that will take title to a property be done once you are far enough along in your due diligence to know you are more likely than not to...
I’m New to Syndication; Should I use Rule 506(b) or 506(c) for my Offerings?
I’m New to Syndication; Should I use Rule 506(b) or 506(c) for my Offerings? Approximately 95% of our returning syndication clients and all beginning syndicators do 506(b) offerings (that allow up to 35 sophisticated, non-accredited investors and...
Where Can I Find Big Investors for my Deals?
Where Can I Find Big Investors for my Deals? Looking for large investors can be a dead end for many syndicators until they have significant syndication experience. A lot of new syndicators spend tons of time seeking “whale” investors only to learn...
Can I Bring on Investors as Joint Venture Partners? Can They be Non-Accredited?
Can I Bring on Investors as Joint Venture Partners? Can They be Non-Accredited? Basically, all investors must have a role in generating their own profits (more than just voting rights) to be Joint Venture partners. This only works with a small...