Syndication Articles
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 document attesting to...
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, such as the Regulation D, Rule 506(b) exemption (and some state securities exemptions), allow investments by a limited number of non-accredited but financially...
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, but general...
Can I Convert a Rule 506(b) Offering to a Rule 506(c) Offering?
Yes, you can – but you will have to stop raising money for the 506(b) offering for at least 30 days before you can start raising money for the 506(c) offering. This is going to be a problem if you are raising money for a specific property that closes within 90...
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 investors are...
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 entity to take title...
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 for a specific deal....
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 anything, or be owned by...
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 liabilities). One...
Real Estate Syndication Law Lessons for Passive Investors, with Taylor Loht
Guidance from Kim Lisa Taylor about what red flags to look out for, as well as basics of real estate and other things about syndication every investor should know.
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.
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 hold a meeting, take...
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 you are raising money from...
Transcript: ‘How to Prepare for Multi-family Investing in Times of Rising Interest Rates and Economic Stress’
Edited transcript from the Raise Private Money Legally podcast episode, “How to Prepare for Multi-family Investing in Times of Rising Interest Rates and Economic Stress” With Special Guests Jake Stenziano and Gino Barbaro Originally recorded: October 20, 2022 Kim Lisa...