Syndication Articles
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...
How to Legally Raise Private Money
In this episode of the podcast “Cashflow Ninja,” host MC Laubscher interviews Kim Lisa Taylor about “How to Legally Raise Private Money,” which also is the subject of Kim’s best-selling book on Amazon. As Laubscher notes, this is an essential topic for anyone involved...
How Should a Syndicate Manager take title to its Carried Interest or Promote?
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? There are tax reasons you may want to...
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 return for investing...
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-YEAR INVESTOR RETURN!! The ad went on to show photos of a multifamily property, discussing the status of due diligence and...
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?
QUESTION: “I have a pre-qualification questionnaire that lists the qualifications for an Accredited Investor. Is this 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...
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 within one state, then the SEC will allow states to regulate the sale of securities. The securities will usually be...
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, and a passive investment (otherwise known as an “Investment Contract”), where investors are relying on...
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 multifamily trainers and go to their events. You’ll learn how to buy your own, what to look...
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 sophisticated. That’s why a lot of syndicators might ask you to complete a pre-qualification questionnaire early in their...
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 are Accredited within 90 days of the investment. The SEC, in its final rule...
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 learning more about group real estate investing. Then, you need an established plan of how you...
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, Subscription Agreement and Securities Notice filings. Others are not as cumbersome, such...