borrowing money from other investors - Posted by Rou Tran

import · January 30, 2005, 7:56pm

Posted by rou tran on January 31, 2005 at 07:54:30:

what if i offer a 1st or 2nd mortgage to the investors?

import · January 30, 2005, 7:56pm

Posted by Rou Tran on January 30, 2005 at 20:56:08:

I am thinking about advertising to others to invest in my business. I am now in my second year of investing in california and have made pretty good profits.

Question if I advertise in the paper, by sending emails to the 16 people on my buyers list and by contacting local deep pockets - is there anything to look out for as to not break any SEC law or anyother trade laws?

Such as putting in the paper that I guarantee their money will return them a 8.7% return?

Thanks,
Rou

import · January 30, 2005, 9:38pm

Re: borrowing money from other investors - Posted by chet

Posted by chet on January 30, 2005 at 22:38:30:

I wrote a draft of such an add and sent it to my atty (here in CA) He sent an email back to me that I was breaking atleast 5 law in the add.

To sell to the public, you basically need a private placement memo. or take advantage of some loop holes (friends and family, “qualified” investor, Internet offerings, etc.)

If these people seriously are previous business contact they forming a JV or friends and family might apply.

import · January 30, 2005, 9:19pm

Re: borrowing money from other investors - Posted by Mike W

Posted by Mike W on January 30, 2005 at 22:19:35:

Rou,

You question does not make sense. You are seeking funds from other investors. You do not want to break any SEC laws. Yet, your next sentence suggests you should offer a guaranteed return. What!

Rule number one: NEVER EVER offer a guaranteed return, either in print or verbally. A guaranteed return is considered an investment contract and comes under the scrutiny of the SEC right away.

Instead, offer a first or second Deed of Trust. Offer equity in one or more properties. Just don’t offer a general guarantee.

Good luck!

Michael